My Take on Leading economic indicators up more than expected

A simple metaphor for “stimulus” spending is that it’s like steering an enormous cruise ship.  It doesn’t turn the economy on a dime.  You have to steer it (spend) well before you want to turn (before a recession).  Gov’t spending takes 9-12 months to get through the system to generate economic activity (not that it’s good activity).

That’s what makes this Forbes.com headline good: “Leading economic indicators up more than expected”.  The public, politicians and policy makers don’t realize we’re in a recession until we’re well into it.  Usually by the time they act, the economy corrects itself.   It’s happening again: none of the recent “stimulus” has hit yet, but we’re already in the turn away from recession.

Now when the stimulus does hit, it will be like we’re oversteering…which will require an equal oversteer in the opposite direction….which may require another jerk of the wheel.

That’s why it’s best to leave things alone.  It’s hard because the public is yelling for “experts” to “do something” but the first priority for policymakers is to get Hippocratic and “do no harm”.

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