Quote:
Originally Posted by Vendzilla
Japan did the stimulus route, 10 times
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Japan also reversed the stimulus policy in 1997 with a sales tax hike, which proved to be too soon. Then, since their policy interest rates were already at zero, they proceeded to drag their feet performing any quantitative easing (creating money -- what the US did in QE2).
They also hid the toxic assets on the banks balance sheets -- something the US is not doing (or at least not to as great of an extent as Japan did).
So far, the monetary and fiscal policies executed in the US have had the intended effect (ie; preventing the economy from slipping into a deflationary spiral / liquidity trap, which was well on its way).
Of course, the US faces the problem of future tightening of fiscal stimulus as the pressure for austerity measures mount politically.
Be careful what you ask for.