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China has undertaken a 6 of GDP stimulus package aimed (mostly) at infrastructure the United States has enacted a two year 800 billion spending and tax rebate package. The Federal Reserve and the Bank of England lowered short term interest rate targets to near zero and are adopting quantitative easing i.e., continuous infusions of money.

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For China s, the income effect of global demand is significantly larger than the price effect of the exchange rate. The fall in China s trade surplus since late 2008 is attributable mainly to the global slowdown and the stimulus package introduced by the Chinese government, rather than to changes in the RMB s exchange rate.

Now we're running a stimulus package.

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Immediately after the collapse of Lehman Brothers in September 2008, China unveiled a 4 trillion ( 650 billion) stimulus package. The economy rebounded quickly, with the annualized growth rate soaring to 12.1 in the first quarter of 2010.

It's called the trillion dollar stimulus package.

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So I really cannot understand Barro s last paragraph The fiscal stimulus package of 2009 was a mistake. It follows that an additional stimulus package in 2010 would be another mistake...