Faber: Stimulus Bill Will Hurt, Not Help
kdakota630 - © 2009 Newsmax
February 09, 2009
Investment guru Marc Faber blasts the Obama administration’s fiscal stimulus package, saying it will keep the economy and financial markets underwater.
“The current crisis is a direct consequence of continued U.S. government intervention into the economy through fiscal and monetary policy that has been designed to never have a recession,” he told Bloomberg TV.
The economy needs a recession, Faber says. “If you never have a recession, it’s like someone who never sleeps.”
Bottom line: “With the stimulus package the government is proposing, I think the depression will last longer, and the unproductive government will continue to grow at the expense of the private sector.”
Some, including superstar bond fund manager Bill Gross, have said the government needs to spend even more than the $900 billion or so being considered. Faber, of course, isn’t one of them.
“If the government spends that kind of money in stimulus, it will have dire consequences,” he says.
“If you have a stimulus package, fiscal deficits go up, and eventually you end up with higher interest rates and inflation. There is no free lunch. Someone has to pay.”
Faber isn’t the only one taking issue with the stimulus plan.
“The fiscal package now before Congress needs to be thoroughly revised,” Harvard economist Martin Feldstein wrote in The Washington Post. “In its current form, it does too little to raise national spending and employment.”
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