Friday, March 12, 2010

The "self" dilemma

We face a dilemma of sorts. Call it a selfish dilemma.

While it may benefit me personally for the government and the Fed to continue stimulating the economy, it is not necessarily in the best long term interests of the country to do so.

Therein lies the dilemma. At a personal level, it makes absolute sense for me to support the government's stimulus efforts. I am a large beneficiary, albeit indirectly, of the bailout. The rise in the markets has increased my company's AUMs, thereby solidifying its financial position, thereby bolstering my employment situation, thereby helping provide food, shelter, and clothing for my family (and indirectly those from whom I purchase those goods).

By stimulating at the scale that they have, authorities are effectively rolling the dice and hoping that it will somehow solve our problems. It might, but most likely it won't.

No comments:

Post a Comment