But stimulation is by definition bringing sales forward, and Policy (with a capital "P"!) has its consequences. Some programs (like "Cash for Clunkers") have the potential for borrowing from 2010-11. Others, like mortgage credits and even monetary policy, have a finite life to them. They end and the artificiality of the stimulative initiatives is lost -- and the economy becomes "real" demand-dependent. Given the past shock, it's hard to see a solid view of that demand.
Consumer Remains the Achilles' Heel
Then there is the consumer, who remains particularly exposed in the period ahead. Private wages and salaries fell by a record 5.2% annualized rate in July. While some improvement from depressed levels can be expected, the labor market remains weak and jobless claims are still elevated. The possibility exists that the consumer will retreat from the decades-long aspirational spirit and turn back toward the legacy of the post-Depression mentality of maintaining the status quo. With this reset could come disappointing personal consumption expenditures and a higher level of savings that will likely match the post-World War II average savings rate of 7.5% and could even begin trending back toward the direction of double-digit savings rates that existed in the recession of the early 1980s.