Well, we're dealing with two separate matters. The "bailout" and the stimulus package are not two peas in a pod. I work in the bowels of the finance industry (although not as an economist anymore. Yes, companies actually hire those), so I was a bit closer to the bomb than most. But like I said, it's two different issues. Although I'm happy to debate the bailout.For all the apocalyptos who talked about the end of the financial system last fall, one thing bears remembering--there is no historical evidence to support their scenario of a banking götterdämmerung.
The stimulus was not about financial armageddon. That was the bailout. The stimulus was about getting out of the muck caused by the financial crisis. The problem is, it just was not needed. As for the "worst case" scenarios regarding the financial system: They were not wrong. At least not in terms of the worst case or or something slightly less than that being a realistic and somewhat likely scenario.uating the choice to apply stimulus vs doing nothing, we have to ask the question: what if those "worst case" scenarios were wrong?