by Frank James
One reason it was important for the recently passed economic stimulus to be as large as possible was because of the political reality that it would be difficult to get another major stimulus through Congress.
The amounts taxpayers have already spent on financial bailouts and a previous stimulus as well as growing concerns about federal deficits were clearly going to make the $787 billion stimulus passed weeks ago a tough act to follow.
That's why there was disappointment among some economists like Paul Krugman that President Barack Obama didn't push for a larger stimulus, something much closer if not at $1 trillion.
Now Politico reports that there appears to be no appetite for a second stimulus, even though there are increasing concerns that the recently enacted American Recovery and Reinvestment Act just won't be enough economic stimulus, when it's all said and done.
An excerpt:
Nancy Pelosi said this week that she's keeping the door open for a second stimulus bill.She may be the only one.
As the nation continues to shed jobs, an increasing number of economists are saying Congress will need to pump more money into the economy this year. But reaction on Capitol Hill has been almost uniformly negative -- and much of the blowback is coming from Democrats.
"If there's appetite, there's not in my office," said Sen. Tom Carper (D-Del.). "Enough for now. No mas. No mas.""It is too soon," said House Financial Services Committee Chairman Barney Frank (D-Mass.). "No sensible person is trying to guess what will be appropriate policy six months from now."
"It sounds to me that would be a monumental lift," said Sen. Ron Wyden (D-Ore.). "Somebody's going to have to convince me how they're going to pay for it."
Just three weeks after President Barack Obama signed a $787 billion stimulus package -- and on the same day that he signed a $410 billion omnibus bill loaded with earmarks -- the idea of spending more money to juice the economy was one that few members were willing to embrace.
Even Pelosi's staff tried to walk back comments the speaker made Tuesday.
So there's the very real possibility now that the $787 billion stimulus won't be enough to keep unemployment heading past the 10 percent mark next year and that another stimulus might be the only action that could keep things from getting significantly worse.
But there's absolutely no political will left to do any more. And the closer we get to next year's mid-term congressional elections, the less will there'll be.
Comments
No, Pelosi wants a second stimulus, but some Dems and the White House were spooked that her efforts would make it appear that the original stimulus wasn't working. There may be another one yet, but don't look for any publicity.
http://www.political-buzz.com/
Posted by: matt | March 12, 2009 8:32 AM
Unfortunately, Speaker Dimwit isn't the only one keeping the door open for a second stimulus. So is House Appropriations Committee Chairman David Obey of Wisconsin . The loons are lining up to spend more of your grandchildrens' money.
.
http://www.cnn.com/2009/POLITICS/03/10/second.stimulus/
Posted by: Terry | March 12, 2009 8:37 AM
TribLib Frank James writes "another stimulus might be the only action that could keep things from getting significantly worse."
Nope. When the trouble is too much debt, it's economic insanity to borrow and spend even more money and thus pile up a huge new debt.
The recently-passed "stimulus" bill will only DELAY the inevitable recovery. Adding another expensive 'stimulus" bill on top of what we've passed already would only lengthen the delay.
Since The Swamp writers won't present both sides, I will. Here's a link to Larry Kudlow, one of many economic writers who object to the Obama-Pelosi-Reid Porkulus Bill. http://kudlow.nationalreview.com/
Posted by: Dissent is Patriotic | March 12, 2009 8:49 AM
I wouldn't consider the prospect of a second stimulus "unlikely". I think it was the plan all along, as Obama's aides have been dropping subtle hints about it for some time. Obama will just have to hit the road again and sell some more fear; e.g., we need to act now or we'll never recover, etc., etc. We'll see if the public buys it this time around.
Posted by: Herbie H. | March 12, 2009 12:00 PM
I think "economists like Paul Krugman" should keep their mouths shut. The practioners of the "dismal science" completely missed our current economic troubles - why should we have confidence in their proposed solutions? I'm an Obama supporter but I don't think anyone knows what the solution is - not the economists nor the Obama administration.
Posted by: phyllisf | March 12, 2009 2:22 PM
This might be the best news that we've had for weeks.
The best thing that the government can do now is LEAVE US ALONE! and let us sort it out.
When news comes that a stimulus is coming down the pipeline, everything stops until it's clear what the government is going to do to us next. Particularly when it's our money, our children's money, and our grandchildren's money that we're being stimulated with.
One can understand that politicians might feel the need to take some action, any action, though, given the number of people who will answer "No" to the question "Do you think (Politician X) is doing enough to (address Threat Y)?" "Do you think Barack Obama is doing enough to counter possible invasion by space aliens?" "No!"
"A government big enough to give you everything you want is big enough to take away all you have." Thomas Jefferson, the first president from the Democratic Party, said that. He'd be a William Buckley Republican today, wouldn't he?
Posted by: DaveB | March 12, 2009 5:50 PM
A simple stimulus the House and Senate could pass is to limit credit card interest rates and student loan rates to the 30 years US treasury note.
That would add billions to consumers' pockets.
Plus, why should poor and middle class borrowers underwrite the banks with the huge spreads on their loans?
Posted by: Michael Tracy | March 12, 2009 9:11 PM
Michael, that would probably mean the end of credit cards for all but the most wealthy. (Which might be a good thing for those who can't control how they use them!)
Treasury securitries have low rates because they are secure investments; someone who invests in them is sure to get his money back, with interest. Credit cards are unsecured investments for banks, and have a relatively high default rate. The interest charged is high because of the risk, and covers the defaults by those who charge and don't pay at all.
For myself, I can't recall the last time I paid any credit card interest. I follow two simple rules:
1. Don't charge anything I don't know how I'll pay for; and
2. Pay the balance in full when the bill arrives.
Posted by: DaveB | March 13, 2009 8:59 AM
* * * * *
Posted by: DaveB | March 13, 2009 8:59 AM
.
I don’t disagree with you, but I have easier rules regarding credit cards. Don't use them. Instead, pay for stuff in cash and buy life essentials first. If everyone followed these rules, those greedy, usurious sons-of-guns who run the credit card industry would go out of business. People might even find out that they can actually have some money left over once in a while if they recognized their own limits.
.
It's time that people learned that debt is not an asset. Debt and credit are evil even when necessary. Debt and credit have always been the main causes of economic downturns. It was one of the prime causes of the Great Depression, and it was the root of the economic downturn we are now experiencing. (And I’m talking about commercial leveraging as well as the home loan industry.)
.
I have now climbed down off of my soap-box.
Posted by: John W. | March 13, 2009 12:06 PM