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President Obama announced his most recent plan to stimulate the economy and "put America back to work." It is something, but as Krugman points out, I don't think it is quite enough from the sound of it.
Robert Reich is almost apocalyptic and he suggests it is imperative we have more boldness from our President:
No president in modern times walks a tightrope as exquisitely as this one. His balance is a thing of beauty. But when it comes to this economy right now -- an economy fundamentally out of balance -- we need a federal government that moves boldly and swiftly to counter-balance the huge recessionary forces still at large.
States and cities, for example, are estimated to be $350 billion hole this year and next. They can't run deficits so they're wildly cutting spending, cutting jobs, cutting contracts, and raising taxes and fees. That's a huge anti-stimulus package roughly as big as the remaining direct spending in the old federal stimulus package. Which means, Obama's "new" stimulus, announced today, is about all we have, and it's not nearly enough.
The word in Washington is we're out of the woods. The rate of unemployment dipped from 10.2 percent in September to 10 percent in October. In our nation's capital, a one-month trend marks a turnaround. Don't believe it for a moment. The real story of October was the increasing number of Americans who dropped out of the labor force, too discouraged even to look for work.
Main Street is hurting worse than ever. Ten percent unemployment translates into roughly 18 percent of our workforce unemployed or underemployed. Housing markets are in terrible shape: One quarter of homeowners are paying more each month than their houses are worth; the rates of tardy mortgage payments continue to rise. Thirty percent of American households contain someone who has lost a job and can't find another, and yet almost all households are dependent on more than one wage earner in order to make ends meet. A quarter of all American children are now dependent on food stamps.
There is no reason to tolerate this degree of misery. We know exactly what to do. The government has the fiscal tools to do it. Start by bailing out state and local governments (if Congress would prefer to call it a loan and require payback over the next five years, fine). Renew unemployment and COBRA benefits. Increase federal spending on infrastructure. If we have to, hire people directly. The package should be $400 billion over two years.
We don't know exactly how much the President is proposing to spend, but sources tell me it's in the range of $70 billion, redirected from the $200 billion in TARP savings. The President's small, calibrated attempt to balance a stimulus with deficit reduction will in fact make the deficit worse over the long haul. It postpones the day when we're back to near full employment, when almost all Americans who need a job get paychecks on which they pay taxes. This isn't really balance at all. It prolongs the economic imbalance.
It is apparent Obama is trying to walk a fine line and sneak in a second albeit smaller stimulus. But he should not be concerned about sneaking anything in, people ultimately care about jobs, not how the Beltway operates. And it is time for the president quit trying to be Abraham Lincoln and to be more like Franklin D. Roosevelt, who learned a thing or two about listening to deficit hawks and big business before a full recovery:
The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little… I see one-third of a nation ill-housed, ill-clothed, ill-nourished.
And that Mr. President is what Main Street wants from you, recognizing the importance of our times and acting boldly on the behalf of the millions upon millions of un or under employed.
I am Frank Chow and I approved this message
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