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Current economics theory suggests to spend our way out of a recession, but is that a good thing?

I disagree, i think the economy needs to fix itself, give it time to heal. A bailout is the equivalent of curing a hang over by drinking more. It may feel better in a short term, but long term you still are going to feel the pain.

What happens if the bailout does not work? Governments will be deep in debt with no revenue to pay for it. Interest rates will have to go up (to sell debt bonds) and the economy once again will slow down.

I think recessions are a good thing, they remind us to save for a rainy day, the reprice things back to affordable, and show us which investment managers are running scams.

I guess we will have to just sit and watch how this unfolds, but i have a bad feeling about all these bailouts.

This entry was posted on Wednesday, February 18th, 2009 at 4:47 am and is filed under Investing, economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.