Buffett: Second Stimulus May Be Needed
Add super-investor Warren Buffett's voice to the growing chorus broadly hinting that a second taxpayer-funded economic stimulus may be needed, even as the effectiveness of the first one is being debated.
"I think a second one may well be called for," Buffett said on ABC's "Good Morning America" today. "It is not a panacea. A stimulus is the right thing."
Buffett said President Obama's first government stimulus -- $787 billion, approved earlier this year -- is like "half a tablet of Viagra and then having also a bunch of candy mixed in --- it doesn't have really quite the wallop."
Okay, Warren! Thanks for oversharing!
Yesterday, we reported that the leaders of the G8 summit, now underway in Italy, have not ruled out a second stimulus for some of its member nations, such as the U.S. and Britain.
Christina Romer, one of Obama's top economic advisers, said the administration will do "whatever it takes" to turn around the economy, without specifically mentioning a second stimulus.
But we refer here to legendary actor (and personal hero) William Shatner, who once correctly said that if an actor tells someone "I love you" enough times, the actor convinces himself he is in love with that person.
This second stimulus may come about the same way: people keep talking about it; it happens.
In this piece from yesterday, The Post's Lori Montgomery notes that only about 14 percent of the money from the first stimulus has actually been paid out. It will take until the end of next year before even 75 percent gets paid out, the Congressional Budget Office says.
In the interview this morning, Buffett said: "We're not in a free-fall, but we're not in a recovery either."
"We were in a free-fall really in the last quarter of last year, starting in the financial markets and spreading to the economy, and we had this huge change in behavior," Buffett said, possibly acknowledging the rise in consumer savings or perhaps the end of the Wall Street investment bank as we knew it.
Buffett, chairman of Berkshire Hathaway and a director of The Washington Post Co., is either the world's richest or second-richest person, depending on the day.
He darkly warned in the interview this morning that unemployment, now officially at 9.5 percent, could hit 11 percent before beginning to drop.
July 9, 2009; 11:48 AM ET
Categories: The Ticker | Tags: Berkshire Hathaway, Warren Buffett, stimulus plan, unemployment
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