This is the second part of the stimulus break down, if you missed the first part I will post a link to it at the end of this article. We are aware by know that our president thinks and is determined to spend our way out of a recession. Will it happen, can it happen; to find out I continued reading "Catastrophe" by Dick Morris and Eileen McGann. It doesn't matter if you are a right winger or left, facts are facts so lets look at them.

Japan ran into a similiar situation back in the 90's and tried a similiar tactic. The Japanese economy was shrinking at an alarming rate and something had to be done. So they turned to what is known as Keynesian economics, which is named after John Maynard Keynes. Keynes was a writer who theorized that government should run defecits in times of depressions instead of balancing budgets and making cuts where need be. The results are listed below year by year of Japans spending spree.

1992: An $85 billion stimulus plan was passed. The result were not as expected, investments continued to crash and the Debt- to-GDP was 68.6%

1993: The first one did not work so let's try again. $117 billion and some tax cuts the economy continues to fail. More to come in 1993 $59 billion spent on low intrest home financing, still the Debt-to-GDP ratios grows to 74.7%.

1994: Again $150 billion is printed and spent, still nothing happens except the Prime Minister resigns due to a corruption scandal. Debt-to-GDP is at 80.2%

1995: I guess some people never learn. $137 billion is spent and no improvement.

1996: They increase the consumption tax from 3% to 5% and things get worse. 

1998: This time two stimulus package are passed in one year $128 billion and $195 billion. Their Debt-to-GDP is at 114.3%.

1999: And another is passed for $70 billion Debt-to-GDP is at 128.3%.

Does any of this look familiar, if not click on the link below. Obama's plan is over a period of several years, all of his money got approved at the same time unlike Japans. The results will probably be the same if history repeats it self and it usually does. So we have nothing but bad economic times ahead if the spending continues. Lets hope our Debt-to-GDP doesn't get as bad as Japan. Part 3 will be posted sometime in the next few months.

http://www.xomba.com/breaking_down_stimulus_package