I do not know how many understand what this amount of spending will do to the value of the dollar. I will try to explain so there is no doubt when this comes to fruition, at least you, who, read this will have a reference to why inflation will kill our economy.
This is money that we do not have and will have to borrow in-order to implement and as every one knows, when you borrow you are charged a percentage rate of interest. This means that 800 billion is just what we borrow with out interest (w/1.4[+]T) and yes this may buy some time but, will cause repercussion for the long run. The money shot into the economy will bring our dollar down and in-return cause things like oil, gas, imports (and all that it entails) to go up because our dollar will become weak. This means our money we as citizens are struggling to get by with at this point will not go as far (hard to imagine even less). Now keep in mind this amount of money being injected into the economy has never been done before; all other stimulus is dwarfed by this amount. We will not feel the effects of this for about 1 to 3 years (closer to 2yrs.) and this is why most economists have some doubts for it doing anything but prolonging the recession if it does not put us into a depression.
This was done in Japan in the 90’s and it was a total failure as stated by Arning, Holger, (10/05/98), “In the last few years there have been at least four runs on Japanese banks that were short of cash. In each case, the Bank of Japan stepped in and loaned them literally truckloads of cash to tide them over, at annual interest rates less than I percent. The loans stopped the rims on the banks but put more cash into circulation, contributing to inflation, one reason the yen has fallen in terms of dollars. Three years ago, a dollar would buy 80 yen; now it buys 130 to 140. […] If the government continues to print money and make the value of the yen shrink, uncontrolled inflation will result, which will sink millions of Japanese into poverty. No political party or politician will want to be associated with that.” (Vol. 37, Issue 40) This is why Japan’s economy took so long to recover in the 90’s.
This is why I say , what is in this bill should not be in it until we get our economy back on track. Knowing there are “special projects” and “government spending” for “government workers pay raises” makes it very hard to justify. What we spend now will affect us later in ways which could cause us to falter and falter we will. We need to get what is not considered immediate economic stimulus out of this bill.
Arning, Holger, 10/05/98, JAPAN'S CRISIS CASTS A SHADOW OVER U.S., Fairfield County Business Journal, Vol. 37, Issue 40