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“By the Time its New Steps Are Done, the Fed’s Balance Sheet Will Reach $4.5 Trillion, or About a Third of GDP”

Posted By admin On March 19, 2009 @ 12:55 pm In Commentary | Comments Disabled

George Washington’s Blog [1]
Thursday, March 19, 2009

Paul Krugman has been calling for more government intervention into the economy than just about anyone else.

Krugman is calling for stimulus in the US and European Union of 4% of GDP [2]:

“My back of the envelope says on both sides of the Atlantic we should be having a stimulus that peaks at 4 percent of GDP annually …. The United States is not doing enough to fight the crisis and Europe is doing a bit less than half as much as the United States.

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“By the Time its New Steps Are Done, the Fed’s Balance Sheet Will Reach $4.5 Trillion, or About a Third of GDP” obamadecept 340x169 [3]

However, as noted in the Economist [4]:

By the time its new steps are done, the Fed’s balance sheet will reach $4.5 trillion, or about a third of GDP, up from less than $1 trillion a year ago, Capital Economics estimates.

I understand that dollars spent on stimulus and the size of the Fed’s balance sheet do not necessarily have an exact correspondence. But the size of the Fed’s balance sheet does give an indication of the massive scale of Bernanke’s tinkering.


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URLs in this post:

[1] George Washington’s Blog: http://www.washingtonsblog.com/2009/03/by-time-its-new-steps-are-done-feds.html

[2] 4% of GDP: http://www.bloomberg.com/apps/news?pid=20601087&sid=af2rkgeqQz40&refer=home

[3] Image: http://www.prisonplanet.tv/subscribe.html

[4] Economist: http://www.economist.com/finance/displayStory.cfm?story_id=13325328&source=features_box_main

[5] Wells Fargo Says It Doesn’t Have to Reserve Against Its Off-Balance Sheet Residential Exposure Because the FHA (Meaning the Taxpayers) Will Pay For It: http://www.prisonplanet.com/wells-fargo-says-it-doesnt-have-to-reserve-against-its-off-balance-sheet-residential-exposure-because-the-fha-meaning-the-taxpayers-will-pay-for-it.html

[6] Presenting The Fed’s Balance Sheet Through 2012 – Fed Will Surpass China As Top Holder Of US Debt By The End Of The Month: http://www.prisonplanet.com/presenting-the-feds-balance-sheet-through-2012-fed-will-surpass-china-as-top-holder-of-us-debt-by-the-end-of-the-month.html

[7] Federal Reserve Balance Sheet Set to Explode: http://www.prisonplanet.com/federal-reserve-balance-sheet-set-to-explode.html

[8] Greenspan Slept as Off-Balance-Sheet Toxic Debt Evaded Scrutiny: http://www.prisonplanet.com/greenspan-slept-as-off-balance-sheet-toxic-debt-evaded-scrutiny.html

[9] Pimco: Fed Needs to Double Its Balance Sheet: http://www.prisonplanet.com/pimco-fed-needs-to-double-its-balance-sheet.html

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