by William Neikirk
More than three months after President Barack Obama's election, Congress is finally getting around to passing a massive stimulus package to save the U.S. economy.
In all the dispute and political maneuvering in Congress, one idea is often lost: We have fallen a full quarter into the hole, and it will take even longer to get out of that hole.
And another sobering fact: This stimulus package might not even work to the degree hoped.
But in the swift downturn we have had, many people don't realize the importance of time in dealing with a recession quickly as jobs are lost, spending is curtailed, and everyone succumbs to fear.
Economists have a way of looking at this in terms of "gaps" in GDP (for gross domestic product). Michael Drury, economist at McVean Trading and Investments in Memphis, said the economy's potential growth is about 3 percent a year. If there is no growth at all for one quarter, that amounts to a .75 percent fall in GDP from its potential, he said, and an estimated 750,000 loss of jobs.
This is a horrible price to pay for dithering. If we were to have "zero growth" for an entire year, that would mean a loss of 3 million jobs. If the economy actually declines, the employment loss would be higher. And we have been declining for some time.
The Center for American Progress has noted a Congressional Budget Office report saying that this GDP gap could total $2.7 trillion from 2009 to 2011 without the stimulus package, or $8,800 for every man, woman and child in America.
This gap "would be the largest―in terms of both length and depth―since the Depression of the 1930s," CBO said.
Many people felt frustrated that Congress couldn't act more quickly after the November election. But the Bush administration wasn't excited about a stimulus package.
And Obama had trouble moving his bill along once he took office. Only a handful of Senate Republicans saved him.
While careful deliberation in such large pieces of legislation is needed, it should be remembered we live in perilous times with no time to waste. Our Congress is accustomed to acting on 19th century schedules in a global economy where information moves in seconds
The Center for American Progress says the stimulus bill will not solve the economy's problem all by itself. More action is needed to rid the country of toxic bank assets so that lending can resume at a more normal pace. And everyone agrees this is a monumental, complex problem that will tax the ingenuity of our public officials.
Yet we have been slow to address our problems. Going from Election Day to Valentine's Day without a bill to save the economy will exact its price on all of us.
Comments
The Stimulus bill is unlikely to work at all. I have no beef with gambling a trillion dollars on make-work projects repairing neglected infrastructure and updating systems; plus tax cuts. That's the concept that Obama floated early on, before he took office, and I was all for it.
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That's not what was delivered. The Democrats had an orgy of stuffing this legislation with earmarks pandering to their various constituencies and not enough for infrastructure. Result: a lot of money spent to create/save no jobs.
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Doing nothing at all would have caused less damage.
Posted by: mJ | February 13, 2009 8:21 AM
As I posted, if 1M$ =1 second, 800B would equal 24,800 years, and our omniscience Congress has not even taken the time to study the true contents of this bill. This is not only the epiphany of ignorance it represents the utter failure of our democratic institutions. America has lost. Even if you support this boondoggle, can we honestly ask ourselves if this is the way we should govern our country? Next on the list, trillions for banks. Change looks like "winging it on a hope and prayer", and Obama has dropped the hope and I'm not sure about prayer either, so that leaves "winging it" that we can't believe in.
Posted by: Bubba Porter | February 13, 2009 8:27 AM
If I grasp the concept of this idiotic article fully, it's just ducky to rush a pork-filled package through with virtually no consideration? Inside a week or two? It sounds as though the writer has fully bought into the "Obama is the Messiah" concept, and -- Constitution be damned! -- should have been allowed to ruin the economy faster than he's going to! How about the fact that Congress did pass bills -- but they were disasters? How about the notion that economic cycles come and go, and this one isn't fun but that it, too, will end? How about addressing the problems -- subprime loans, etc., that got us here in the first place, instead of buying into Hope and Change's nonsense?
How about the inconvenient economic facts, such as that unemployment was HIGHER during the recession of the early '80s?
This story is nonsense.
Posted by: beth | February 13, 2009 9:34 AM
Ankle biters HOOOOOOOO!
I watched Vannity last night and he was whining about "pork" in the bill. One of the quests had stated that the pork the republicans whine about still creates jobs it's just that they don't like the project. Vannity kept saying pork so the quest asked him to say what he finds pork.....all he could say was STD which he knew full well was pulled from the bill......he never gave an example. Pork to republicans are jobs for people they could care less about.
Posted by: bill r. | February 13, 2009 9:37 AM
And if 1M$ = the number of brain cells in the average obstructionist republican's head, we could all buy a cup of coffee.
MJ, The bill is actually pretty balanced. Geithner was around for the 2 Trillion dollar Japanese bailout in the early 90's. The lessons learned were too much $ for infrastructure jobs which are short term, and not enough in education and healthcare.
Doing nothing would be a disaster.
Posted by: Bubba ✔ | February 13, 2009 9:41 AM
That would be guest....not quest......I know the anal police are out today!
Posted by: bill r. | February 13, 2009 9:51 AM
Too much pork, porkulus pork sammich porky pork.
I can't explain it or define it but I just love complaining about it.
mmmmmm.......pork.
Posted by: Blubber Snorter | February 13, 2009 10:07 AM
Get used to it, after the spendulus bill that is about to be signed into law, we should have a few more of these quarters
Posted by: Terry | February 13, 2009 7:26 PM