Warren Buffet Wrong On Push For A Second Stimulus Package

By Bonnie Erbe, Thomas Jefferson Street blog

I thought Warren Buffett was smarter than this. He told ABC News the United States may need a second federal stimulus package:

Buffett, a supporter of President Barack Obama during last year's election campaign, said a second economic stimulus package might be needed. The Obama administration says it does not see a need for a second stimulus yet.

"I think a second one may well be called for. It is not a panacea. A stimulus is the right thing. You hope it doesn't get watered down," he said.

Huh? The first one hasn't worked (at least not yet), so spend us deeper into debt? I don't think so. According to the General Accounting Office, the reason the first one hasn't yet fueled a recovery is that few funds from the first stimulus package have yet been released:

A report released Wednesday by Congress' investigative arm, the Government Accountability Office (GAO), says the bulk of the money will be released in 2010, later than expected due to bureaucratic delays.

We won't even start to feel the inflationary effects of the overspending produced by the first package until 2011 or later, if it is going to take more than a year for those funds to turn into a significant number of new jobs. Now is too soon to talk about the second package. Even White House sources are downplaying such talk. Buffett should, too.

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By Bonnie Erbe