If everything goes well, in a few weeks from now, we may have sown the seeds of a major bull run. We say so because a new wave of stimulus money is most likely to be unleashed in the biggest economy of the world, the US. Sensing that the current efforts are not keeping more people employed at their work, President Obama has called for a major new burst of federal spending. "We avoided the depression many feared. Our work is far from done," Obama thundered in a recent speech. He further added that he wants to spend new money for highways and bridge construction and for ensuring adequate social security net for the US citizens, especially to the unemployed. And the figure that is being talked about is in the region of US$ 170 bn.
Of course, given the kind of fiscal mess that the US is in, spending more would have meant going further down the path of suicide. But what has given some government authorities hope is the unexpected windfall that the government is likely to make from early repayment of bank bailout funds. With the same likely to fall in the vicinity of US$ 200 bn, much of the fresh stimulus money could be spent from it without further endangering the fiscal health of the US economy. Thus, it looks like the US economy will get another shot at trying to bring its GDP to respectable levels and reduce the current record unemployment. And since the US is still the growth engine of the world, this could also mean a great opportunity for the global economy as a whole to finally put the crisis behind it. If it does indeed lead to desired results, this could be one more reason why we could be on the cusp of a major bull run.
Of course, given the kind of fiscal mess that the US is in, spending more would have meant going further down the path of suicide. But what has given some government authorities hope is the unexpected windfall that the government is likely to make from early repayment of bank bailout funds. With the same likely to fall in the vicinity of US$ 200 bn, much of the fresh stimulus money could be spent from it without further endangering the fiscal health of the US economy. Thus, it looks like the US economy will get another shot at trying to bring its GDP to respectable levels and reduce the current record unemployment. And since the US is still the growth engine of the world, this could also mean a great opportunity for the global economy as a whole to finally put the crisis behind it. If it does indeed lead to desired results, this could be one more reason why we could be on the cusp of a major bull run.
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