A Trillion Dollar Barack Obama Stimulus Package Could Spur Inflation

By Bonnie Erbe, Thomas Jefferson Street blog.

We all wish Congress and the White House our best as the Democratic leadership begins to cobble together President Roosevelt, er, Obama's plan to revive the economy. As Reuters puts it, Monday's meeting between the incoming President and House Speaker is designed to kick-start the economy:

WASHINGTON (Reuters) - President-elect Barack Obama and Speaker of the House of Representatives Nancy Pelosi will meet on Monday to discuss a stimulus bill aimed at kick-starting the ailing U.S. economy, The Washington Post reported on Thursday.

It said Obama and Pelosi will discuss the timing and scope of the legislation, intended to spur job growth and likely to include big infrastructure investments and tax cuts.

Obama transition officials declined to comment.

Pelosi, a California Democrat, has said she wants a bill ready for Obama to sign when he takes office on January 20. That timing is now seen as overly optimistic, the Post said.

The Washington Post notes the proposed timing for the bill (to be ready in less than three weeks) is overly optimistic. Let us hope it is also not over-sized. As I've blogged before, hyperinflation is a well-justified fear among Wall Street types and more than a trillion dollars in government spending is more likely to send the economy into overdrive than just about anything else.

And while they're at it, let's hope the Democrats do a much better job of regulating how and where the money is spent. If, like the bank bailout bill, it ends up lining the pockets of corporate higher-ups, it could quickly eviscerate the Democrats' current popularity.

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By Bonnie Erbe