Will the Economy Wither?

With about half of the $787 billion stimulus deployed and the target Federal interest rate cut to nearly zero, the government has jump-started the economy—but it's unclear how much of the economic gains were driven by short-term stimulus and whether the economy will continue to thrive. As many of the stimulus packages—like the $8,000 housing credit and the plan to buy $300 billion in Treasury bonds—expire, the danger is that the structural changes occurring in the economy are so deep that government policies to support growth will run out before the economy adjusts. In order to remain self-sustaining, the U.S. economy needs to shift from consumption and home building to business investment and exports, but government efforts to prop up the economy are likely to expire before the transition is complete.