Reply #15: Krugman July 2, 2009 [View All]

[depakid]

O.K., Thursday’s jobs report settles it. We’re going to need a bigger stimulus. But does the president know that?

et’s do the math.

Since the recession began, the U.S. economy has lost 6 ½ million jobs — and as that grim employment report confirmed, it’s continuing to lose jobs at a rapid pace. Once you take into account the 100,000-plus new jobs that we need each month just to keep up with a growing population, we’re about 8 ½ million jobs in the hole.

And the deeper the hole gets, the harder it will be to dig ourselves out....

Wait — there’s more bad news: the fiscal crisis of the states. Unlike the federal government, states are required to run balanced budgets. And faced with a sharp drop in revenue, most states are preparing savage budget cuts, many of them at the expense of the most vulnerable. Aside from directly creating a great deal of misery, these cuts will depress the economy even further.

So what do we have to counter this scary prospect? We have the Obama stimulus plan, which aims to create 3 ½ million jobs by late next year. That’s much better than nothing, but it’s not remotely enough. And there doesn’t seem to be much else going on. Do you remember the administration’s plan to sharply reduce the rate of foreclosures, or its plan to get the banks lending again by taking toxic assets off their balance sheets? Neither do I.

All of this is depressingly familiar to anyone who has studied economic policy in the 1930s. Once again a Democratic president has pushed through job-creation policies that will mitigate the slump but aren’t aggressive enough to produce a full recovery. Once again much of the stimulus at the federal level is being undone by budget retrenchment at the state and local level.

http://www.nytimes.com/2009/07/03/opinion/03krugman.html

depakid Tue Feb-10-09 09:15 PM

Nice job cutting federal revenue sharing out of the stimulus

Leave it to the Senate to find a way to muck up one of the better portions of the stimulus bill.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3729356&mesg_id=3731562