Defaulting banks - where will it stop?

[Magda Hassan]

Interesting. I was just reading this column by Joseph Stiglitz (one of the few honest high profile economists--the Obama administration has ignored him completely, but I digress) that mirrors what you said Maggie. (The section in red.)


http://www.chinadaily.com.cn/opinion/200...249981.htm

Harsh lessons we may need to learn again

By Joseph E. Stiglitz (China Daily)
Updated: 2009-12-31 07:51



The third lesson is that Keynesian policies do work. Countries, like Australia, that implemented large, well-designed stimulus programs early emerged from the crisis faster. Other countries succumbed to the old orthodoxy pushed by the financial wizards who got us into this mess in the first place.

Yes, pensioners and other welfare recipients and their dependents were given about $1,000 each just before Christmas 2008 with which they duly spent at the shops. I think there was another one about 6 months later. There were also bonuses and rebates and grants to buy new houses, cars, insulation, install water tanks, solar panels etc. Most of these are finished now and what ever effect it has has gone through the system. It will be interesting to see how the next year pans out now it is back to just business as usual.