Wednesday, July 8, 2009

A Second Stimulus?

Earlier this year, conservatives squawked loudly about the Obama economic stimulus package. Too costly, they said. Meanwhile, those on the left, including the Nobel Prize–winning economist Paul Krugman, argued that it wasn't enough.

But now, unemployment has already exceeded what the administration anticipated. Last month's unemployment figures were sobering following the prematurely giddy reaction to better–than–expected numbers in May (not "good," as I have observed before, just "less bad").

And, following Joe Biden's admission on Sunday that the administration "misread" the economy (don't you love that word? It reminds me of the 1970s when the folks in the Nixon administration said they "misspoke" on a whole range of things of which some knew little and others knew more than they were letting on), Kevin Hall and David Lightman of McClatchy Newspapers are speculating about the need for a second stimulus package.

"Only about a tenth of the money has been spent so far, and only about half of it will have been spent by October 2010, according to the nonpartisan Congressional Budget Office," they write.

"Meanwhile, the unemployment rate stands at 9.5% and is headed higher. More than 6.5 million jobs have been wiped out since the recession began in December 2007. Home foreclosures continue at record rates, despite a flurry of government programs. Remember those toxic assets clogging bank balance sheets and resulting in a credit crunch? Treasury's program to deal with them still isn't producing results.

"This wasn't what the administration envisioned."

Frankly, I find it hard to believe this is what the American people envisioned when they went to the polls last November.

But it's what they've got. And, as Hall and Lightman point out, the Obama administration has made its task much more difficult by "fostering unrealistic expectations." And now we're hearing talk about a second stimulus package.

House Majority Leader Steny Hoyer talks about being open to the idea, but Hall and Lightman observe that it will be easier said than done in the Senate, where "there's less appetite for additional stimulus — and little chance of getting the 60 votes needed to push one through."

It seems clear to me, though, that this time, if there is going to be a second stimulus package, it absolutely must focus on job creation. Long–term goals, like health care and alternative energy, are important, but we've squandered nearly six months that could have been used to put America back to work but have failed to do so. In that time, unemployment benefits have expired for many, and hundreds of thousands of people feel as if they have slipped through the cracks.

It's too late for some and getting close to it for others.

Back in February, Sen. Ben Nelson said the members of Congress who worked out a compromise on the stimulus package should be called "the jobs squad."

Well, where are all those jobs now, senator? If your compromise had delivered as advertised, we wouldn't need to have this conversation right now, would we?

Jack Cafferty of CNN has been asking his viewers if they think a second stimulus is needed.

But, you know, maybe the problem here is in the name. It needs a name that will address what is really the objective, and you aren't going to stimulate the economy until you start putting people to work.

As Mike Lux writes at Open Left, we need a jobs package, not a stimulus package.

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