An agreement on economic stimulus package that includes rebates for many Americans has been approved by Congressional leaders and the president, but there’s still a lot of disagreement on whether it will work. Iowa State University economist Meghan O’Brien is one who wonders about the impact of the package.
O’Brien says from past history you have to be skeptical of the timing of the package coming in an election year. She says technically there has to be a certain number of quarters without growth before you say it’s a recession, and so far there’s only been one quarter. O’Brien admits that the public view is different.
She says the public would tell you that we are already in a recession, while the economic statistics and data used to determine that would say it’s just beginning. "So, I think there’s an inherent conflict there, that the public opinion may be different than that of the policymakers," O’Brien says. O’Brien says the difference in opinion on the situation may determine how well the stimulus package works.
O’Brien thinks the consumers feel the help is coming too late, and says when that happens over history, you can’t say that it will take care of the problem. "If the perception is that it’s too late, that very well may become a self-fulfilling prophecy in terms of consumers," O’Brien says. The stimulus package still has to be approved by the full House and Senate.