Debate over Obama stimulus plan

There's been some comparison in the media of President-elect Barack Obama's stimulus plan and the Japanese efforts to address their own mortgage and bank meltdown in the 1990s, and also FDR's response during the Great Depression.

Media Matters has a good summary of the discussion.

The fact that both sides are taking raising taxes out of the picture shows there really is no debate going on. Both sides defer to "supply-side" economics. Really you can not compare the situation to FDR's time because taxes on the rich were raised very sharply to lift the country out of the Great Depression.

Also, there really is not a real debate on either a stimulus plan or further corporate bailouts. We all know there will be more of both, probably a whole lot more. It's just a matter of how it all gets payed for. We have see how in nearly every case, the government will break down in the end and come through with the money especially in the case of corporate dole-outs.

As I've mentioned before, one really can not compare the current situation to that faced by Japan, which had very large personal savings in reserve to pay for their deficit spending. Japanese citizens and businesses lent their government trillions at nearly zero interest rates to save failing Japanese banks and to jumpstart the economy.

In the U.S., they have a net negative savings rate. Much of the money will have to come from abroad, or they can try to print money out of thin air like Zimbabwe or the Weimar Republic.