After sitting on the fence for weeks as noted in Battle Lines Form Over “Son of Stimulus” president Obama finally makes up his mind.

The door is closed and Obama rejects 2nd stimulus.

President Barack Obama said Saturday the $787 billion stimulus program must be given a chance to work before consideration is given to a second such jolt for the still-ailing economy.

Obama acknowledged in his weekly radio and Internet address that people are getting nervous about continuing high joblessness — the unemployment rate hit 9.5 percent in June — but said reversing payroll losses takes time. He asked Americans to be as patient as possible.

“We must let it work the way it’s supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity,” Obama, who is visiting Ghana on Saturday, said in his recorded message.

Buffett, the CEO of Omaha, Neb.-based Berkshire Hathaway told ABC’s “Good Morning America” this week that a second stimulus may be needed, but it, like the first, wouldn’t be a panacea.

The plan “was not designed to work in four months,” Obama said. “It was designed to work over two years.”

This is good news for the treasury market as well as good news for fiscal sanity, but I doubt the stock market sees it that way. Keynesian clowns will not see it that way either.

I am all for waiting two more years to see if the first stimulus works given that the whole idea of stimulus packages is misguided from the start.

Mike “Mish” Shedlock
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