Last I checked, it is thought that we are growing at about a 3-4% pace, and that the ‘stimulus’ was at it height right now, adding about 3% to the economy. That means nearly ALL current growth was directly related to stimulus efforts, which are currently at their maximum effect.
[quote]These estimates suggest that the ARRA added two to three percentage points to real GDP growth in the second quarter and three to four percentage points to growth in the third quarter. This implies that much of the moderation of the decline in GDP growth in the second quarter and the anticipated rise in the third quarter is directly attributable to the ARRA.”[/Quote]
Within 6 months current stimulus effects will not be adding growth to the economy. Either the ‘positiive feedback cycles’ pickup or we start to go back to 0 or negative.
[Quote]“Fiscal stimulus has its greatest impact on growth around the quarters when it is increasing most strongly. When spending and tax cuts reach their maximum and level off, the contribution to growth returns to roughly zero. This does not mean that stimulus is no longer having an effect. Rather, it means that the effect is to keep GDP above the level it would be at in the absence of stimulus, not to raise growth further. Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009.”[/Quote]
Basically either it works, or they will try a higher dose sometime before the elections in 2010.
My bet is on ‘higher dose’.
