February 9, 2009

Faber blasts stimulus bill

Investment maverick Marc Faber said the U.S. stimulus package under consideration in Washington would backfire, in part because the government will grow.

With the stimulus package the government is proposing, I think the depression will last longer, and the unproductive government will continue to grow at the expense of the private sector, he said in an interview, Moneynews.com reported Monday.

Akin to a fire's role in a natural environmental cycle, Faber said an occasional recession was a necessity. If you never have a recession, it's like someone who never sleeps, he said.

While some believe the government's spending plan does not go far enough, Faber said the spending would have dire consequences.

If you have a stimulus package, fiscal deficits go up, and eventually you end up with higher interest rates and inflation. There is no free lunch. Someone has to pay, he said.