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January 25, 2011



There are some who say that employing the use of bailouts and spending a lot of money to revive the economy isn't a logical solution to our economic problems. What's your opinion of those remedies Frank?

Frank Warner

Certain extra spending is necessary in a recession. That is for unemployment benefits, which should have a time limit. Occasionally, government also can help a company back on its feet, if the company shows it has readjusted its expenses to make the "bail-out" a good bet.

All of this government aid has to be within reason, especially in a time when government has saved nothing from its good years for its "rainy days."

Right now, it appears that most of the "stimulus" spending, about $500 billion a year, is being wasted, and too often directed at failing businesses, uneconomical projects and special interest groups. We've gone so far that we're thwarting the free market.

It's no wonder the unemployment rate remains at Depression levels, above 9 percent. We're in a hole, and we're making it deeper.

We've taken none of the tough steps we took in the early 1980s, precisely because, for a few years, it is politically uncomfortable to reduce debt and let the economy find a new and healthy equilibrium.

But as long as we refuse the sour medicine, the disease will linger and probably grow worse.

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