Monday, March 24, 2008

Economic Stimulus Package Analogy

I heard this analogy about why the Economic Stimulus Package won't do much to help the economy a few weeks ago and have been meaning to write it.

Basically, if you look at the Iraq War spending as a leak in a pool and the tax cuts and preventing any new water from being put in the pool, then the stimulus package is the equivalent of trying to keep the pool full of water by taking water out of the deep end and putting it in the shallow end.

Until you a) fix the leak (end war funding or cut it back to something manageable) and b) add more water (let the tax cuts expire) the water level in the pool is going to keep dropping.

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