{"id":58928,"date":"2021-08-07T13:00:09","date_gmt":"2021-08-07T18:00:09","guid":{"rendered":"https:\/\/olduvai.ca\/?p=58928"},"modified":"2021-08-07T13:00:09","modified_gmt":"2021-08-07T18:00:09","slug":"government-stimulus-keeps-having-a-diminishing-effect","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=58928","title":{"rendered":"Government &#8220;Stimulus&#8221; Keeps Having a Diminishing Effect"},"content":{"rendered":"<h3 class=\"page-title\" style=\"text-align: left;\"><a href=\"https:\/\/mises.org\/wire\/government-stimulus-keeps-having-diminishing-effect\">Government &#8220;Stimulus&#8221; Keeps Having a Diminishing Effect<\/a><\/h3>\n<h3 class=\"page-title\" style=\"text-align: left;\"><img decoding=\"async\" class=\"media__element b-lazy b-loaded\" style=\"color: #333333; font-size: 16px;\" title=\"\" draggable=\"false\" src=\"https:\/\/cdn.mises.org\/styles\/slideshow\/s3\/static-page\/img\/cash-jump-wire.jpg?itok=GZ1I8O80\" alt=\"cash jump start\" \/><\/h3>\n<div id=\"slideshow\" class=\"group-image-wrapper field-group-html-element pull-left\"><\/div>\n<div class=\"body-content clearfix\">\n<p>The\u00a0United States economy recovered at a 6.5 percent\u00a0annualized rate in the second quarter of 2021, and gross domestic product (GDP) is now above the prepandemic level. This should be viewed as good news until we put it in the context of the largest fiscal and monetary stimulus in recent history.<\/p>\n<p>With the\u00a0Federal Reserve\u00a0purchasing $40 billion of mortgage-backed securities (MBS) and $80 billion in Treasurys every month, and the deficit expected to run above $2 trillion, one thing is clear: the diminishing effect of the stimulus is not just staggering, but the increasingly short impact of these programs is alarming.<\/p>\n<figure>\n<div><iframe loading=\"lazy\" title=\"FED May Hide Risk For A While... But A Financial Crisis Is Building\" src=\"https:\/\/www.youtube.com\/embed\/LgRrqc1lEXU?feature=oembed\" width=\"604\" height=\"340\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/div>\n<\/figure>\n<p>The GDP figure is even worse considering the expectations. Wall Street expected a GDP growth of 8.5\u00a0percent\u00a0and most analysts had trimmed their expectations in the past months. The vast majority of analysts were sure that real GDP would comfortably beat consensus estimates. It came in massively below.<\/p>\n<p>What is wrong?<\/p>\n<p>In recent times, mainstream economists only discuss the merit of stimulus plans based on the size of the programs. If it is not more than a trillion US dollars it is not even worth discussing. The government continues to announce trillion-dollar packages as if any growth at any cost were acceptable. How much is squandered, what parts are not working, and, more importantly, which ones generate negative returns on the economy are issues that are never discussed. If the eurozone grows slower than the United States, it is always blamed on an allegedly lower size of stimulus plans, even if the reality of figures shows otherwise, as the European Central Bank (ECB) balance sheet is significantly larger than the Fed\u2019s relative to each economy\u2019s GDP and the endless chain of fiscal stimulus plans in the eurozone is well documented.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Government &#8220;Stimulus&#8221; Keeps Having a Diminishing Effect The\u00a0United States economy recovered at a 6.5 percent\u00a0annualized rate in the second quarter of 2021, and gross domestic product (GDP) is now above the prepandemic level. This should be viewed as good news until we put it in the context of the largest fiscal and monetary stimulus in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[16957,209,12584,2326,7617,827],"class_list":["post-58928","post","type-post","status-publish","format-standard","hentry","category-economics","tag-daniel-lacalle","tag-diminishing-returns","tag-government-spending","tag-government-stimulus","tag-mises-institute","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=58928"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58928\/revisions"}],"predecessor-version":[{"id":58929,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58928\/revisions\/58929"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=58928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=58928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=58928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}