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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 
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 :
“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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However, as noted in the Economist :
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:
 George Washington’s Blog: http://www.washingtonsblog.com/2009/03/by-time-its-new-steps-are-done-feds.html
 4% of GDP: http://www.bloomberg.com/apps/news?pid=20601087&sid=af2rkgeqQz40&refer=home
 Image: http://www.prisonplanet.tv/subscribe.html
 Economist: http://www.economist.com/finance/displayStory.cfm?story_id=13325328&source=features_box_main
 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
 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
 Federal Reserve Balance Sheet Set to Explode: http://www.prisonplanet.com/federal-reserve-balance-sheet-set-to-explode.html
 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
 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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