There are lots of academic studies on bailouts and stimuli; and also on money printing. In terms of fiscal spending, bailouts usually don`t work. When the government sits in and tries to offset sagging private demand with government demand, it usually does not work.
This is the pattern we have seen in the past. The long term effect on the US Economy from all the bailouts and deficits is basically that government`s debt will rise very substancially and the balance sheet of the Federal Reserve will expand.
Many people believe that the global recovery will begin in late 2009. I seriously doubt that. I think it will be at least two years from now, worst case maybe 10. And when we do start recovery, interest rates will rise and inflationary pressures will be enormous. (April, 2009)
