A Trillion Dollars?

Some of us might consider a trillion dollars to be handy cash. Apparently that’s the amount it’s going to take to get the economy back awake from its current comatose state. Bloomberg is reporting a growing consensus that we will have to pump at least $500 million a year into the economy to offset the consumer’s disappearance: Bloomberg.com: News

Think about that. $1 trillion. Most economists now think we will need to add the equivalent of between 3% and 5% of annual GDP to provide enough activity to prevent further contraction. That’s where the $500 million a year comes from.

The latest economic indicators are truly awful. We have now entered a kind of historical time warp where each index, such as housing starts, business confidence, etc, are all announced as having historical significance. Usually this means that they are the worst the particular index has been since some terrible, dark time long before any of us was born.

This cannot be good.

Breaking records can be fun in sports. In an economy there is a premium on steady and unspectacular. Having already established this as the worst recession since the Depression, we have to hope that we can claw our way back and never match the records of that time.

A trillion bucks is an expensive way to avoid becoming an all time statistic.

Who knows if it’s enough?