Government Spending is Our Only Friend; We Need to Make New Ones

http://www.insidearm.com/news/00004418-government-spending-is-our-only-friend-we/

Global markets plunged on Tuesday, and are continuing to fall Wednesday. The consensus is that an extremely poor consumer spending report sparked the selloff.

The Commerce Department’s report that consumer spending fell 0.2 percent in June did provide the spark. But it ignited a powder keg of doubt among economic watchdogs centered on one hard-to-reconcile idea: the economy is going to tank without the massive injection of government spending we’ve seen over the past two years.

In the debate over the direction, size, and scope of government spending, another recent mud-flinging debate has been set aside: the argument over the effectiveness of the stimulus.

Read the entire entry on insideARM.com’s blog on Forbes.