Many people from all over the world, from politicians to common citizens, from financial gurus to taxi drivers have given their 200 dollars worth of comments on President Obama's decision to spend the way out of the recession.
I just saw him being slammed by a political leader on why he should not do so, and why the political leader's nation should save and consolidate their finances. Frankly, when I saw what he said, my first thought was "Selfish B******".
I'm not sure about you, but to me, the government serves two purposes, one is to make the economy and citizens prosper, and second to make sure they are safe and secure. Prosperity normally occurs during good times, and is something not difficult to do when boom is happening everywhere. By this I mean you can make mistakes, even gross mistakes and still get away with it with little damage.
During bad times, its a totally different story. A small mistake and you will see a major repercussion on your finances, or the economy. The role of the government is to ensure you squirrel away enough money during good times, so you can literally "spend your way out of recession". If you want to see how this can happen, just look at the recent Singapore story, where Singapore is finally eating into her past reserves to ensure her citizens are still "safe and secure".
In my opinion, President Obama is doing the right thing. I mean, in this time, if even the government is not spending, who is going to spend? Let me get this clear. I'm not saying I like the idea, as the spending is based on eroding the spending power of the USD, and I'm pretty heavily vested in USD. Its just that the alternative (spending lets say the next 10 years in a recession mode) is just too cruel to think about. Now, in the second year since the problem started, the second batch of niversity graduates who are coming out into the marketplace are having problems finding jobs. Together with the number of unemployed, as well as the people sunk in debt, and I think its a major repercussion this time. If this is to continue for the next 10 years, what would be the implications? In my opinion, its horrendus!!!
Now consider the government spending his way out of the recession, and once US is out of recession, it also means the rest of the world will soon be out of their own recession. It will only mean the United States being the "savior" who is the only one trying to stimulate the WORLD economy while the whole world sits and wait for the Unites States to do their job, and for them to "grow" relatively to the States. Wonderful!! Just, are these governments doing their job? or are they perhaps just being passive about the whole thing, maybe saying its not my problem as I did not cause the issue. Or maybe just thinking that the party who caused it should solve it on his own, even if it causes my citizens stress.
Thus far, President Obama had done a good job in strategizing the growth of the United States and probably even whats happening in the world. I'm not sure what the future will be like, or he will continue to make the decisions I think is good, but for now, I'm happy for his decisions!
For those who are doubting what had happened, think about what had caused the bear relief rally we are currently undergoing, all over the world? Its the spend your way to recovery at work! And looking at the crude indicators that I use to monitor the major markets, it looks to sustain over the week, which will mark the second week of wonderful returns. Even if I think the market is overdoing it and is due for some big disappointment in the near future(the next few weeks if not the next week), if its not for this sudden respite, people would have lost their hopes by now. I've friends who have benefited from the bear rally when they entered the market darly on, and exited by now. At least they have made money from the stock markets during this bad time. And guess what? Historically, the greatest money made is based on percentage rise of the indexes are DURING bear markets. And its during one of these bear rallies that a finaly market recovery finally emerged.
Regardless, all this is my personal opinion.