Warren Buffet Wrong on Push for a Second Stimulus Package

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Robert Schiller (great economist) predicted the sub prime meltdown and the dot com crash. I did my own research and looked at all the problems with sub prime loans in the economy and moved 90 percent of my portfolio into cash one year prior to the crash. Mr Schiller thinks we need to consider a second stimulus just like Buffet. Mr Schiller just recently stated in relevant pasrt as follows:
"The real fact is that we are in a global recession that we haven’t seen since 1930s. We are in a serious economic – that is what aborted the recovery in a great depression is that people were afraid of the government deficit and believe it or not people were afraid of inflation during the Great Depression. So the government didn’t stimulate as much as it should have been and they stayed in the depression for 10 years. We don’t want to make that mistake again".
I would not bet against Mr. Buffet or Mr. Schiller. The derivative market is over 500 trillion and can blow at any time. In addition, there are many mortgage loans due for refinance in 2011 that will cause problems. Moreover, private equity covenant lite loans are additional toxic assets that have not yet exploded. Bottom line: There is a high probability that we need a second stimulus. Not fun but necessary.

Larry Weber of WA 9:35PM July 16, 2009

Robert Schiller (great economist) predicted the sub prime meltdown and the dot com crash. I did my own research and looked at all the problems with sub prime loans in the economy and moved 90 percent of my portfolio into cash one year prior to the crash. Mr Schiller thinks we need to consider a second stimulus just like Buffet. Mr Schiller just recently stated in relevant pasrt as follows:
"The real fact is that we are in a global recession that we haven’t seen since 1930s. We are in a serious economic – that is what aborted the recovery in a great depression is that people were afraid of the government deficit and believe it or not people were afraid of inflation during the Great Depression. So the government didn’t stimulate as much as it should have been and they stayed in the depression for 10 years. We don’t want to make that mistake again".
I would not bet against Mr. Buffet or Mr. Schiller. The derivative market is over 500 trillion and can blow at any time. In addition, there are many mortgage loans due for refinance in 2011 that will cause problems. Moreover, private equity covenant lite loans are additional toxic assets that have not yet exploded. Bottom line: There is a high probability that we need a second stimulus. Not fun but necessary.

Larry Weber of WA 9:35PM July 16, 2009

i agree with bonnie erbe 150 % !!!
i never took him as politicly smart !!!!
I AM ASKING MR. WARREN BUFFET OVERRATED AMERICAN CITIZEN
WHAT HE DID FOR AMERICA DURING THIS RCESSION.
DID HE EVER HEAR PRESIDEN T J.F. KENNEDY SPEACH WHA HE COULD DO FOR AMERICA ????
MR. W. BUFFET HOW MANY JOBS YOU CRIATE WITH YOU BILLIONS LAT SIX MONTHS ?????????????????????????????

MARK W.LESNIEWICZ of IL 3:23PM July 12, 2009

The next stimulis package should consist of a planned reduction in Federal expenditures to reduce the size of the national deficit and debt which will contribute to the long-term growth and stability of our economy. If a plan is drafted and implemented now, we can reduce the size of the Federal workforce through attrition, and carefully prune non-neccessary programs.
The first package was neccessary for the short-term health of the economy, the next one needs to adress the long-term health of the economy.

Stanley of FL 1:58AM July 12, 2009

Buffett is known for his optimisim and his ability to look into the future with whatever the current positions with respect to the companies or for that matter the whole economy. It is apparent that not all the money from the first stimulus is released and working yet towards the recovery, but people like Buffett do not have to wait until all the money is spent to realize what is the actual effect of the first stimulus on the economy.
When he called for the second stimulus, every one knew that it is not going to happen over night and it does not hurt to start talking and exploring the possibility of having a second stimulus starting any time now which is very much likely to be needed to have a complete recovery from this current turmoil.

Ramesh Rathinam of NJ 6:04PM July 10, 2009

Contrary to popular faith, there is no historical relationship between deficit spending and inflation. In the past 50 years, we have the two periods of greatest deficit spending were the early '70's and the early 80's. Inflation went down during those times.
The problem with economics is virtually everyone speaks from intuition, not from facts. I challenge Bonnie to provided evidence deficit spending is related to inflation. (She won't, because she can't.)

Rodger Malcolm Mitchell of IL 1:43PM July 10, 2009

Actually, given that this is the government, which is allowed to coin money, deficit spending is akin to giving someone newly created blood that spoils more rapidly than regular blood, which helps the patient in the short to medium run and might cause trouble in the long run. However, effort can be performed at fixing the spoilage: it is magic blood, blood that might kick-start more blood production through the bone marrow, "might" being the operative word here.

Ricky of NJ 12:55PM July 10, 2009

Deficit spending is akin to giving someone a blood transfusion from her left arm to her right—with the attendant machinery leaking blood onto the floor. Four ounces are extracted; three ounces are returned; and we hope the patient doesn’t die before she perks up. Read more at: http://www.halfjoking.net/obamas-keynesian-faith-based-initiatives.html

Stephen G. Barone of WI 10:13PM July 09, 2009

Hey author of the article: You need to reread his statement. He said the first stimulus was watered down, lacked focus. He also said that it's still not adequate. You are free to argue against his point, but make sure you report the whole story. Otherwise, folks will doubt your credibility.
Also, it's hard to argue financial issues with a man who has made billions by betting on the economy.

Cindy of IN 8:06PM July 09, 2009