President Obama said last week that “America is stronger” because of the February stimulus bill. But it remains a divisive issue and a work in progress, with only 40 percent of its $787 billion spent so far. There seems to be some bipartisan agreement that another stimulus bill would be premature at best. Former Federal Reserve Chairman Alan Greenspan suggested Sunday that the next step should be an extension of unemployment insurance benefits. In light of Friday’s bad unemployment numbers, senators of both parties also stated their support for that approach as well as for extending the first-time homebuyer tax credit and extending benefits to help laid-off workers afford COBRA insurance. If there is debate about a stimulus sequel, expect to hear more along the lines of the call by Sen. John Kyl, R-Ariz., on CNN for targeted tax relief and a lot more talk about the deficits.
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28 Comments
What?
I thought the gubermint needed to spend MORE MONEY FASTER in order to save the nation. The scientific democrat investigation revealed that we can spend our way to prosperity.
Isn’t that the plan?
What kind of sane person believes that a “jobless recovery” is a recovery at all?
I love it, the same people that said “everything is fine”, “the fundamentals are sound” want folks to believe this…
That’s insane.
Eh Linda?
No stimulus sequel for now
=============================
China must have cut us off.
How many have fallen off the unemployment rolls? What is the true number of unemployed Americans?
Thought this stimulus would keep us from going over 8% unemployment. Have we hit double digits yet?
Guess the right was right when they stated that the “stimulus” package wasn’t meant to stimulate, but to pay off/bribe the liberals out there.
How’s that workin out for y’all? Maybe next time you shouldn’t have lobbyists and radicals draw up the plan.
The problem with the various stimulus bills is that they only stimulated those who alrady have a hard-on for our money- banker, carmakers, insurance execs. Nobody even tried to stimulate the voters!
“jobless recovery”
“Doublethink is a word described in the fictional language of Newspeak and the act of simultaneously accepting as correct two mutually contradictory beliefs. It is related to, but distinct from, hypocrisy and neutrality.
Doublethink is an integral concept of George Orwell’s dystopian novel Nineteen Eighty-Four.”
Stimulus bill. Earned Income Credit. Jobless Recovery.
“The power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them….To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies — all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.”
yes, the government needs to spend more and spend faster. Someone has to, and since the American ‘consumers’ are not spending (savings are at a record high level), someone has to pump money into the economy.
That someone is our government.
If anyone here thinks things would be BETTER had the 40% of the stimulus bill NOT gone out the door, raise your hand and offer some proof.
Obviously men and women are working on projects funded by the American Recovery and Reinvestment Act of 2009. See graphic here: http://www.recovery.gov/Pages/home.aspx
Once the economy fully recovers, tax revenues will repay the debt quickly.
As a percentage of of GDP, our debt is half of what it was during WWII. And though critics moaned and wailed about the burden on their children, the post war boom showed them to be wrong.
The post war boom was brought about by a massive savings rate in this country during the war and the fact that many of Depressioon era policies were removed.
Depression, not Depressioon.
Another fallacy is that of burdening our children and grandchildren with current debt. The burden is being felt right now. Interest on the money we’ve borrowed is printed out of thin air. This inflation is a hidden tax on savers and retired people.
The federal reserve will inflate over the next decade to pay off portions of the debt. A devaluation of our money is likely to happen in this scenario. It should be interesting to see how it all plays outs.
I’m pleased that there may be agreement on unemployment and COBRA assistance. It may turn out that the huge wealth accumulation by business during the Bush years may not have hurt us so much after all. True, Bush had to take a trillion from the workers to replace what the businesses took, but it appears we will survive the freedoms the businesses took.
Austrian Econ conveniently ignores that the national debt to GDP ratio was higher during WW2 than its ever been before or since.
In other words, we were more in debt as a nation right before the biggest economic expansion in our nation’s history.
Austrian Econ might really do well to actually study economics someday instead of the ideological crap called economics by the Meises Institute.
The current inflation rate is negative 1.48%…
The current inflation rate is negative 1.48%…
The Congressional Budget Office (CBO) estimates
that the federal budget deficit for 2009 will total
$1.6 trillion, which, at 11.2 percent of gross domestic product (GDP), will be the highest since World War II.
That deficit figure results from a combination of weak
revenues and elevated spending associated with the economic downturn and financial turmoil. The deficit has been boosted by various federal policies implemented in response, including the stimulus legislation and aid for the financial, housing, and automotive sectors.
CBO estimates that, as the economy recovers, if current laws and policies remained in place, the deficit would shrink but remain above $500 billion per year, or more than 3 percent of GDP, throughout the 2010–2019 period. As a result, debt held by the public would continue to grow as a percentage of GDP during that time.
That debt, which was as low as 33 percent of GDP in
2001, would reach an estimated 54 percent of GDP this
year and grow to 68 percent of GDP by 2019.
Those baseline projections, which are similar in many respects to the projections CBO prepared in March, reflect spending and revenue assumptions that may underestimate potential deficits. Because they presume no changes in current tax laws….
The dramatic expansion of the deficit in 2009 (up from 3.2 percent of GDP in 2008) results from a projected rise in outlays of 24 percent (the largest percentage increasesince 1952)
CBO Report to Congress.
Between 2013 and 2019, deficits are projected to range from 3.1 percent to 3.4 percent of GDP, well above the 2.4 percent of GDP that they have averaged over the past 40 years.
Over the 2010–2019 period, under the assumptions for CBO’s baseline, total outlays would average 23.4 percent of GDP—higher than the 20.7 percent of GDP that federal spending has averaged over the past 40 years
Debt held by the public is projected to exceed 61 percent
of GDP by the end of next year, which is the highest level
since 1952, and reach 68 percent by the end of 2019.
That accumulating federal debt, coupled with rising
interest rates, would lead to a near tripling of net interest payments (relative to the size of the economy) between 2009 and 2019.
Over the long term (beyond the 10-year baseline projection period), the budget remains on an unsustainable path.
Continued large deficits and the resulting increases in federal debt over time would reduce long-term economic growth by lowering national saving and investment relative to what would otherwise occur, causing productivity and wage growth to gradually slow.
CBO (not CapnA or DavidB)
Right now it’s at -1.48%, during this amazing “jobless recovery” that we’re getting the priviledge of witnessing. But, give it a year maybe a year and a half…then we’ll get to see what adding all of these many trillions to our economy will do. We’ll get to feel and see the shock and awe of money magic.
http://en.wikipedia.org/wiki/Hyperinflation
Wow. Now I’ve heard it all, “jobless recoveries” and berating people who save. But when Bushco was in office, telling people to “go out and spend”, he was an idiot. I’m not arguing that he was an idiot, mind you, I’m pointing out yet another forgotten history of the dumbazzes.
You ain’t seen nothing yet.
Both in dollar terms and in relation to the size of the economy, the imbalance in the budget projected for
2009 is significantly larger than at any time since World War II. At $1.6 trillion, the expected deficit for this year will be nearly three and a half times the size of last year’s deficit of $459 billion. As a percentage of GDP, the 2009 deficit will be almost twice as large as any deficit in the past 60 years.
Ouch!
CBO projects that, by the end of 2011, debt held by the
public will have grown by nearly $4 trillion from its level
at the end of 2008 and will have risen from 41 percent of
GDP to 65 percent, which is nearly twice the percentage
of GDP that public debt represented 10 years ago.
Between 2012 and 2019, debt will edge up further
relative to GDP, reaching 68 percent in 2019, CBO
Jobless Mom makes $8,673/Month Part-Time!
Must be true, I saw it on the Web!
—————
Could be one of those ACORN arranged businesses.
DavidB
Posted October 5, 2009 at 5:26 pm | Permalink
The current inflation rate is negative 1.48%…
—————–
Yeah DavidB when you have over 17 million unemployed workers businesses are giving stuff away just to get it out the door.
It’s the old supply and demand theory. When demand goes down the supply goes up and then the price decreases. As Pleefer said upthread – sit back and wait.
Mfg will quit making ‘things’ and then as the supply goes down the price will go back up and then inflation will kick in big time.
Doesn’t anyone on the left know anything about how economics works?
And so it begins…
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html
Doesn’t anyone on the left know anything about how economics works?
Yes…
Paul Robin Krugman is an American economist, liberal columnist and author. He is Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs, Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times. In 2008, Krugman won the Nobel Memorial Prize in Economics for his contributions to New Trade Theory and New Economic Geography.
The Nobel Prize Committee stated that Krugman’s main contribution had been to explain patterns of international trade and the geographic concentration of wealth by examining the impact of economies of scale and of consumer preferences for a diverse goods and services. Krugman’s work on international economics, including trade theory, economic geography, and international finance has established him as one of the most influential economists in the world according to IDEAS
Krugman is also known in academia for his work on liquidity traps and on currency crises.
As of 2006, Krugman had written or edited more than 25 books, 40 scholarly articles and 750 columns at The New York Times dealing with current economic and political issues.
Doesn’t anyone on the left know anything about how economics works?
Yes…
Robert Bernard Reich is an American politician, academic, writer, and political commentator. He served as the twenty-second United States Secretary of Labor under President Bill Clinton, from 1993 to 1997.
A summa cum laude graduate of Dartmouth College, Reich is a former Harvard University professor and the former Maurice B. Hexter Professor of Social and Economic Policy at the Heller School for Social Policy and Management at Brandeis University.
He is currently Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley. Reich also serves on the board of directors of Tutor.com, and is a trustee of Economists for Peace and Security.
Doesn’t anyone on the left know anything about how economics works?
Yes…
Joseph E. Stiglitz, who won the Nobel Prize in economics in 2001
Joseph Eugene Stiglitz (born February 9, 1943) is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979). He is also the former Senior Vice President and Chief Economist of the World Bank. He is known for his critical view of the management of globalization, free-market economists (whom he calls “free market fundamentalists”) and some international institutions like the International Monetary Fund and the World Bank.
Just because someone counts someone else’s beans does not make them an economic policy maker… especially when judgement is clouded by a dogmatic failed philosophy..
No one is berating an increased savings rate… it’s just that some entity has to take up the slack until the economy re-calibrates.
A big push for green jobs and new industries is part of this re-calibration.
DavidB: Heck, I assusmed all those post about the Economy were from MA’s in Economcis at least, specializing in Macro vs Micro. You mean all those comments are merely cut a paste from people who don’t know what they’re talking about? Could it be that that behind all the bravado of our bleating bean counter posters dwells a huge amount of ineptitued? Wow.