Will Stimulus Packages Really Help The Economy?

There are major stimulus packages being announced all over the world and the biggest of course is the one being proposed by President Obama, 850 Billion dollars - that's 850 thousand millions! Also included in this list are many major European countries, Australia and our friends North of the Border Canada have all either injected funds already or are in the process.

The question is will injecting money fix the problem or are tax cuts a better and more viable option? Let it be known that I am not an economist or an expert in international economic affairs, that being said aren't these experts the ones that got us into trouble in the first place? Ok, so here is my opinion on this issue. On the one hand you have many conservatives all over the world that think tax relief is the answer and the argument is that people won't spend the extra money, they will just save it.

Most Liberals think injecting money into infrastructure is the answer and the argument to this is that these massive projects will take time to get started and the immediate injection of jobs and money won't happen fast enough. Then there are the unions that want the money to go towards the auto sector and other union industries to ensure there will be jobs tomorrow for their respective unions.

Here is what I think needs to happen, governments around the world need to get banks and lenders lending money. The lack of money available for big business, small business, mortgages and car loans is what in affect is causing a huge portion of the problem. In many countries around the world the governments do have some control over the banking sector, why can they put together programs not to bail out these banks but to get the ones with money to start lending? I guess what I am really trying to say is, the banks have made enough money from us over the years and now they have decided not to lend money to anyone regardless of how good their credit is, let's get our governments to start forcing these guys to lend more money and loosen up their lending requirements.

While in a free market can a government force a bank or lender to lend money? In many countries I think they have the power to do so and what really bothers me is no banks have stepped up to the table to try and use this as an opportunity to really clean up. Think about, it in most markets the lack of funds has more to do with fear than any real basis of bad lenders, there are many examples even in the United States where good qualified borrows are getting turned down. You would think one of the hundreds of banks would step up and start doing business with these people. Just think about how this would impact their business once this crisis is over, people don't forget the guys that helped them when no one else would and my point is there are great low risk opportunities to make this happen.

I don't have all of the answers and this crisis is really complicated, I have to think that if everyone had access to credit at a more reasonable level this recession would turn around in a hurry. There is money out there and lots of it, so to all you big bank executives be a hero not only for the people but for your business' and your shareholders!

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