Will the $800 Billion-Plus Stimulus Plan Bring Economic Recovery?

Among these policies, less stringent mortgage lending terms generated millions of subprime mortgages with a face value of several trillion dollars. Cheap money under Greenspan’s leadership at the Federal Reserve led to a bubble in housing prices, which burst in 2006. Falling house prices, rising adjustable-rate mortgages (ARMs), negative home equity and rising foreclosure rates triggered widespread losses in the financial sector.

Unprecedented attempts by the Federal Reserve and the Treasury to strengthen the financial system have only been partially successful. The Obama Administration and the Democrat- controlled Congress pushed a deficit spending program of $800 billion-plus. Will this stimulus package bring about economic recovery?