Take this bleak assessment issued recently by investment house ABN Amro: "The Obama stimulus package has a multiplier or bang for the buck of around one" ABN told its clients. "This means that there is around $1 of GDP added for each $1 of stimulus spent.
"The Rudd stimulus package seems to have a much lower multiplier of 0.3 in its first year and no more than 0.6 in its second year. The multiplier is much lower because the Rudd package chooses to spend its money on social infrastructure rather than economic infrastructure.
"In terms of economic impact, the bang for the buck in the Rudd package is so soft it must be rated as a dull thud. The object of the stimulus package appears to be to simply take the edge off the current recession until such time as the cut in interest rates administered by the RBA generates a recovery in private investment and recovery in the Australian economy.
"Put together, this stimulus package has more bonuses than Wall Street."
