Peter Schiff writes about the prospects for a new, larger stimulus package. I agree completely with what he says, it is a theme that I have mentioned repeatedly.

After a decade long spending orgy, market forces are finally trying to restrict consumer spending and dampen credit. But the stimulus looks to provide a new source of funds after savings, income, and credit have been exhausted. Our imbalanced economy is in desperate need of retrenchment, but stimulus plans will effectively hold the firemen at bay while throwing gasoline on the flames.

It is not so much that economists are bad people, but that they do not know what they are doing. Much of what they “know” is simply wrong. Economists failed to forecast the 1930’s depression. They failed to forecast this one. How can their actions, well-intended though they may be, fix a problem they do not understand? That, in  fact, was caused by their bad advice? Why would anyone accept solutions from someone who did not see this coming?

Don’t think we’re in the early stages of depression? Then check this out:

Volvo said it received 115 order bookings for heavy trucks in Europe in the quarter, down from 41,970 trucks a year earlier.

That’s not recession. That’s collapse, down 99.7%.