Monday, February 11, 2013

Total Fiscal and Monetary Stimulus Since 2008

As many are hopeful that we are finally leaving the financial crisis behind, sometime in the not too distant future the government is going to have to start unwinding the major stimulus that it has provided to the economy through fiscal deficits and monetary expansion since the crisis began.

Below is a cumulative tally of how much stimulus has come from the Fed and Treasury over the last four years.  The total is now about $7T ($5T worth of deficits plus another $2T worth of monetary expansion).  Amazingly, to the extent that one believes that the crisis was primarily housing market related, the $7T total represents ~70% of all the mortgage debt outstanding in 2008.

Cumulative deficit plus change in size of Fed balance sheet since 9/2008

No comments:

Post a Comment

For compliance reasons, I don't post comments to the site, but I do like hearing from readers and am happy to answer any questions. Feel free to use the comment box to get in touch. Please leave an email address in your comment so that I can write back, or email me directly at Skrisiloff@avondaleam.com.