Warren Buffet on the effects of the stimulus package

Warren Buffet’s annual report for Berkshire Hathaway published this morning had these comments on effects of stimus package:

"This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone “all in.” Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation. Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly."

The full report is at http://online.wsj.com/public/resources/documents/WSJ-20090228-berkshireletter.pdf


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