A Look at the World's Largest Stimulus Plans Outside the United States
Germany entered a recession in the third quarter of last year, and its economy is projected to shrink by 20 percent or more next year.
China
GDP: $3.251 trillion (2007 estimate)
Stimulus announced in November: 4 trillion yuan ($585.6 billion). Percentage of GDP: 18 percent
In November, China unveiled a two-year plan to kick-start the economy, hinging on improvements to housing and infrastructure. Proposed projects include constructing 25,000 miles of railways, building 6 million affordable and low-income apartments, reducing pollution, and improving rural water quality.
The effort is the largest of its kind ever to be undertaken by the Chinese government. Worth remembering, however, is that the capital for China's infrastructural projects usually comes from state-owned banks and companies rather than from the government itself. That makes it hard to compare with other countries' stimulus packages.
China's economy is still growing, at 9 percent in the third quarter last year, but that rate is less than its 11.9 percent growth in 2007. And its manufacturing sector, which makes up 40 percent of its economic output, shrank for the third month in December.
United Kingdom
GDP: $2.773 trillion (2007 estimate)
Stimulus announced in November: 20 billion pounds ($29.2 billion). Percentage of GDP: 1.1 percent
The British government's package includes reducing the value-added tax rate from 17.5 percent to 15 percent, the first across-the-board cut in its history. (To offset the cut, duties on gas, alcohol, and tobacco are being raised). Corporate tax increases will be postponed, loans rolled out for small and midsize businesses, and 3 billion pounds ($4.4 billion) spent on roads, schools, and other public-works projects. The money will be spread out through 2010.
Conservatives have attacked the New Labour party for failing to adhere to its promises of fiscal prudence, especially since the sum is predicted to double Britain's deficit to 8 percent of its GDP.
Still, some, including at the International Monetary Fund, say that's not enough. IMF chief Dominique Strauss-Kahn has recommended that countries that can do so invest 2 percent of their economic output in stimulus packages, including Britain.
France
GDP: $2.56 trillion (2007 estimate)
Stimulus announced in December: 26 billion euros ($35.3 billion). Percentage of GDP: 1.4 percent
In an effort to revive the EU's third-largest economy, French President Nicolas Sarkozy unveiled a large stimulus plan on December 4.
State investments eat up 10.5 billion euros ($14.3 billion) of the package; 11 billion euros ($14.9 billion) will go toward repaying sales tax and in tax refunds for research and development. Another 1.5 billion euros ($2 billion) will go to the auto and construction industries, including a credit of 1,000 euros ($1,357) for people who swap their car for an energy-efficient car, a loan facility of 1 billion euros ($1.4 billion) to help auto giants Renault and Peugeot, and plans for building 100,000 social housing units.
Reader Comments
Sorry bout this... but you're just plain wrong
First of all, no matter how the government sells a stimulus the goal is NOT to create a sudden rebound in the economy, but to to save elements of the economy from collapsing altogether. The political idiots of history claim that FDR's package didn't do anything at all. Dumasses all. Why? Because they, like the previous commentators are looking for effects that just plain are not intended. OF COURSE those in power tote any such plan as one that will boost the economy, but that is because their constituents are idiots and they couldn't possibly explain to them the complexities of economics.
The primary objective of increased government spending is to put money in places that it is currently missing and save economic entities from simply evaporating. And, although not perfect, it works. Tax cuts have about 60% of the effect when it comes to helping the economy and that is in healthy economic times. During recessions tax cuts do near to nothing to get things back on track.
It's not about right and wrong and who deserves this and who deserves that. It's a complex money "game".
Money sent directly to the people disappears into thin air. Has this stimulus been targeted accurately and effectively? In some ways yes in others no, but stop watching TV news and take a class on economics if you really want to comment on this process.
Wanna blame somebody? Blame the government that encouraged this entire economic model and allowed the working folks in this country to get RAPED by the powerful and rich over the last 20 years. And yes, that includes BOTH parties and everyone involved, Clintons, Bushes and Reagan. Pull the wool off of your eyes folks
Inflation is coming
With all the paper money flowing around the world, people will be happy for a little while. But afterward, all the crimes and scams will increase to the level you have never seen before. If you think this time is bad, just wait and see the next bubble. When are we going to have some law and order so that honest people can make a decent living without worrying about crisis after crisis?
Personal check
Hurry my check up! Then lower my taxes. Then pay for it by cutting all the endless and needless spending in Washington. Start with all the special interset pork dollars wasted to pad the pockets of those who never get enough to suit them. Then stop giving handouts to folks that make a decision to stay home and contribute nothing to help themselves. If folks get welfare make it mandatory to provide public service jobs in return which will save us money which could in return somewhat fund the handouts. I am all for helping those who make an effort.Lets take Big Money out of politics and make our public servants work for normal $10-$15 an hour like so many they are serving . I wonder how many would want to "Serve".If I get tight on money I have to cut back. It seems in goverment if things get tight we just write a check.What a deal!!
advertisement
