Here Comes the Stimulus Bill--Ready or Not

President Obama returns to the site of his Presidental nomination acceptance speech to sign the 2009 American Recovery and Reinvestment Act which passed Congress last week. Slightly over one-third of the nearly $800 Billion dollar package involved tax cuts and incentives including new Making Work Pay and American Opportunity Tax Credits (MWP is refundable). Additionally, the refundable Earned Income and Child credits have been temporarily increased and payments of $250 to disabled Americans, retirees and Social Security recipients (presumably not two $250 payments to retirees who receive Social Security).

I have little doubt that the bank bailout bill of the Bush administration plus the Obama stimulus will eventually give the economy a "tummyache" in the form of 6-10% annual inflation (probably about two years from now), though I cannot predict whether the Jerry Ford era "Whip Inflation Now" buttons will make a comeback. Will the American Recovery and Restoration Act get the economy back on track in the meantime? Time will tell.