Romer says stimulus package peaking

“Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009,” Christina Romer, who chairs the President’s Council of Economic Advisers, said in testimony prepared for Congress. “By mid-2010, fiscal stimulus will likely be contributing little to growth.”

So what are we going to do next year? If this is the case, then much of the current recovery is associated with this government spending surge. Like other programs, once the foot is taken off the accelerator there will be a slowdown. Thin of the clunkers program. This gives support for the double dip scenario.