Posted by
AJH on Thursday, March 05, 2009 1:24:57 AM
Bailouts and so-called stimulus may actually encourage recessions (“U.S. rescue efforts may risk double-dip recession”). It certainly fosters failure and increases the number of people and businesses asking for handouts.
U.S. companies, consumers and communities may grow so addicted to government financial help that cutting them off could trigger another recession soon after the current one ends.
[T]here is increasing concern that when the flow of public money subsides -- beginning next year when much of that stimulus package is spent -- the economy still won't be strong enough to stand on its own.
"The stuttering attempts to repair the banking and lending mechanisms so far by the new administration suggests that by late 2010, the specter of a second dip into recession will be looming large," economist Sheryl King said.
The latest evidence came on Monday when insurer American International Group was awarded its third bailout. Each one has different terms.
AJH