Annie
Diamond Member
- Nov 22, 2003
- 50,848
- 4,828
- 1,790
Anyone see an end to the downward spiral? How is printing and throwing money willy nilly going to have an effect, other than on inflation?
Was the Stimulus Irrelevant? - Columns - American Issues Project
Was the Stimulus Irrelevant? - Columns - American Issues Project
Was the Stimulus Irrelevant?
By: Edward Morrissey
In early January, a joint paper [PDF file] by Dr. Christine Romer, then the nominee to chair the Presidential Council of Economic Advisers, and Jared Bernstein from Joe Biden's advisory team painted a bleak view of a world without the off-budget stimulus plan. This paper drove the administration's agenda on the stimulus bill and helped formulate the calculus that gave a much higher priority to public-works projects as opposed to tax cuts and business incentives. Failure to act, Romer and Bernstein warned, could have dire consequences (page 5):
The U.S. economy has already lost nearly 2.6 million jobs since the business cycle peak in December 2007. In the absence of stimulus, the economy could lose another 3 to 4 million more. Thus, we are working to counter a potential total job loss of at least 5 million. As Figure 1 shows, even with the large prototypical package, the unemployment rate in 2010Q4 is predicted to be approximately 7.0 percent, which is well below the approximately 8.8 percent that would result in the absence of a plan.
Sounds dire, doesn't it? Unemployment could hit 8.8 percent if Congress didn't start throwing money away immediately, and five million jobs could disappear. In fact, Figure 1 details the challenge better than the text does:....