Warren Buffett: "Nobody Knows" If Stimulus Package Will Work

Calculated Risk:

SG: But there is debate about whether there should be fiscal stimulus, whether tax cuts work or not. There is all of this academic debate among economists. What do you think? Is that the right way to go with stimulus and tax cuts?

WB: The answer is nobody knows. The economists don't know.

Read the whole story: Calculated Risk

Comments

[ianrthorpe]

01:19 PM on 01/27/2009

The only thing that emerges from the interview is that Warren Buffett does not understand economics. That is no barrier to making money of course, how many billionaire economists are there. Bill Gates did not understand computers, all he did was convince people his systems were "user friendly" (they were't) and similarly while buffet has been successful in convincing people his company was investor friendly he has played a big part in moving the western economies from a real economy to a candy floss economy.


http://greenteeth.blog.co.uk/2009/01/26/recession-is-a-success-for-the-government-5452356/

[Peter007]

08:25 AM on 01/26/2009

Let's simplify the problem. Too much credit was extended on houses and people spent all the credit that was given to them. It gave them a false sense of wealth. Now the bills have come due and we don't have the money to pay them. Its only normal to expect that we have to go through a time of reducing our standard of living for a while until the past due bills are paid.
If we don't suffer any consequences of our actions, it would give us the green light to do the same thing over again.
The stimulus package is a political action meant to appease the general population. Its also a way to help congress get re-elected with campaign funds.
The stimulus won't have any long term economic effect.
Short term, select groups of people will benefit and others will have hope but not good jobs. Hope means votes.

[research]

06:15 AM on 01/26/2009

tax cuts won't work.

Bank Bailouts won't work.

MASSIVE infrastructure investment WILL WORK.

Massive Green energy installation, will work.

[Peter007]

08:33 AM on 01/26/2009

Do you have proof?
There' s great line in the new Movie " Doubt". The accused priest asks Meryl Streep what proof she has that he is a molester. Meryl Streep looks at the accused priest and states. " I may not have proof but I have my Certainty."
I heard that line before with Bush and weapons of mass destruction.
No thanks.

[research]

03:11 PM on 01/26/2009

The Great Depression and Hoover versus FDR.

http://www.huffingtonpost.com/users/profile/research

[Chlowina]

12:05 AM on 01/26/2009

The only person who knows if it will work ain't talking.

[BlogComment]

09:35 PM on 01/25/2009

Over the last 4 months I have been listening to our federal government struggle with the economy and more recently the difficulty in administering the loans to our major financial institutions. The numbers on the Federal Reserves web site for Domestic non financial sectors Households / Home mortgage total roughly $137 billion. I am not certain what that actually represents given that the total outstanding for residential mortgages is $10.6 trillion. Anyway, it would seem that the people that are current with their mortgages could be immediately empowered to help keep the credit card industry afloat by paying down their outstanding debt immediately if the next release of TARP funds was used to cover the amount of mortgage payments for one year.

[Peter007]

08:29 AM on 01/26/2009

The TARP funds are meant to be a loan. All the TARP funds have to be repaid back to the Government. Paying peoples mortgages' for them won't accomplish that goal. Its not part of the plan. Maybe illegal too.

[themodernleader]

08:02 PM on 01/25/2009

Unlike the doubting Buffett, I know whether the stimulus package will work. The answer is: Yes and No. Yes, some people will keep their jobs and a number of people will be reemployed. No. The number of employees losing their jobs and the number of businesses going broke will reach epidemic proportions and the the increasing unemployment and economic contraction will reach shocking numbers and percentages.
Also, this program doesn't deal with the massive numbers of idle citizens we have and had before the recession even started. We must follow the principle of "The government as employer of last resort." This was JFK's policy. But any massive Civilian Conservation Corps must bring added value to the Republic. And it must bring competence, powerful values and citizenship education to the participants. Finally, it must be initiated post haste---with all deliberate speed. The most dangerous hands are idled hands.

[SueEll]

10:10 AM on 01/26/2009

Everyone is questioning whether the stimulus package will work. One thing is for certain, doing nothing at all won't save us.

[Bel4life]

07:37 PM on 01/25/2009

It's obvious; it won't work.

Why? Because many of the industrialised Western countries do not produce (export) significant goods, and the level of consumption means there is no savings.

These two important, not-very-exciting-politically points are what drive an economy; that's why we have been living off China for all these years.

Socialism is the new Capitalism.

The global economy WILL crash - the banks will keep thieving off the taxpayer, and we will be given an unpalatable solution: Global Government.

[wrenny]

05:29 PM on 01/25/2009

Interesting that the headline picked for this article was the line having to do with "nobody knows..." - it could just as easily been one having to do with Buffett's faith in Obama's abilities.

[Y2KCockroach]

03:32 PM on 01/25/2009

Hmmm, let's see here. Warren Buffet quote of the day: "I don’t think there’s anybody better than you could have had; have in the presidency than Barack Obama at this time". Rush Limbaugh quote of the day: "So I shamelessly say, no, I want him to fail...". One of these people is a great, proud, and patriotic American; a sage, thoughtful, careful, optimistic and successful visionary. The other one is, well, is..... You decide.

[Peter007]

08:59 AM on 01/26/2009

You should Obama a chance before you cast judgment upon him. He's only been on office a week. Give him some slack.

[BannedInBoston]

03:24 PM on 01/25/2009

That's profound. Nobody knows if ANYTHING will work until it's actually tried.

[rollingdivision]

02:20 PM on 01/25/2009

Of course we know, there isn't a single case where economic stimulus is credited with ending a recession.

[Totto]

01:53 PM on 01/25/2009

In addition to the current stimulus plan, there needs to be additional long-term stimulus. Wind and solar energy needs to be fast-tracked along with high-speed rail between the principal cities in the east and midwest. Our airports are in sorry shape and our air traffic control system is dangerous. A public-private partnership would speed things along. Only when we are competitive with the other industrialized countries will our economy be on solid ground

[Erdgeist]

01:12 PM on 01/25/2009

With regard to the Great Depression according to Seymour Harris, in his book _The New Economics_, the economic policies of FDR were "largely of the shotgun variety". Moreover, there is no real evidence that the FDR Administration used anything Keynesian. Yet, if we look at the data after 1933, keeping in mind that Bureau of Labor Statistics (BLS) didn't consider those who, for example, were working for the WPA as being employed, the New Deal was an unqualified success and put many Americans back to work which had a huge multiplier effect. It is highly probable that if Obama's economic team follows much of FDR's New Deal with seriousness and speed, the economy can show an upturn in less than a year. This means we have to use all the economic tools we have including a traiff on all foreign goods to bring down the National Debt.

[Cherubim]

12:44 PM on 01/25/2009

Ultimately, it will be up to us the American people to fight for our country:
Look Your Children in the Eyes tonight....
http://www.youtube.com/watch?v=wuTjMsqxj64

http://www.youtube.com/watch?v=VUtU9f6oFTs&feature=PlayList&p=A2331AC2966112BB&playnext=1&index=5

[TJCole]

11:56 AM on 01/25/2009

Want to turn this disaster into an economic boom and bring America into the future...

Then we must nationalize certain major essential industries..and assets such as major banks....

Here's the way to do it by invoking certain applicable sections contained in the blue print already in our President's arsenal...

http://www.fas.org/irp/offdocs/nspd/nspd-51.htm

[Peter007]

08:37 AM on 01/26/2009

Thats a good government philosophy.
If it moves. Tax it.
If it keeps moving...Regulate it.
When it stops moving. ... Nationalize it.