China's Stimulus Plan Is No Such Thing

Tuesday, November 11, 2008 | 07:20 AM

Paraphrasing Nixon, have the Chinese become Keynesians now, too?

I don't believe so.

China's proposed $586 billion dollar stimulus plan sure generated a lot of excitement this past weekend. It was amusing to watch the SPX futures tick up on this supposed new program. Especially when we compare it with the $170 billion in tax rebates this summer -- The Economic Stimulus Act of 2008 -- which was only 1% of GDP of the US, versus about 18% of China's GDP.

But is China's plan really a new stimulus? The short answer is no, and it took the market about half a day to figure this out yesterday.

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Continued here

Tuesday, November 11, 2008 | 07:20 AM | Permalink
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