Here is the unvarnished truth.
'Are These Folks Serious?'
Yesterday, President Obama strongly condemned members of both political parties for characterizing the economic recovery package before Congress as a "pork" spending plan for pet projects: "[W]hen you hear these attacks deriding something of such obvious importance as this, you have to ask yourself, 'Are these folks serious?'" Despite the loss of 600,000 jobs last month alone, debate over the American Recovery and Reinvestment Act of 2009 has been reduced to petty bickering over extremely small portions of the overall recovery plan. Marching to Rush Limbaugh's drumbeat, conservatives spent all week on cable news caricaturing tiny portions of the bill -- including provisions that they had previously supported -- in order to score political points and embarrass the Obama administration. But these antics have distracted Washington from "the reality that we may well be falling into an economic abyss." Today, The Progress Report takes a step back and looks at the key principles that should guide the construction of any compromise on the economic recovery package.
IT SHOULD BE IMMEDIATE: In recent days, congressional conservatives have expressed a desire to slow down deliberation over the economic recovery plan. But as National Economic Council Director Larry Summers reiterated yesterday, "We do not have time to wait." He called comprehensive and immediate economic recovery legislation "imperative for our economic security." Evidence of the need for immediate action is clear. Today, the Labor Department reported that the U.S. economy lost 598,000 jobs in January alone, raising the unemployment rate to 7.6 percent. Yesterday, the Labor Department reported that 626,000 Americans applied for unemployment benefits for the first time last week, a 26-year high. These grim reports add to the 2.6 million jobs lost in 2008, 59 percent of which occurred in the last quarter of 2008 alone. And the rate at which job losses are increasing is reaching historic highs. Indeed, in the first 12 months of the current recession, unemployment rose by 2.6 percent -- "the fastest such increase since the recession that started in January 1970." The effects of these increasing job losses can be seen rippling through the economy in the form of increasing credit card default rates, record decreases in the value of homes, and near record high levels of household debt.
IT SHOULD BE BIG: Last weekend, Sen. Jim DeMint (R-SC) explained his opposition to the current recovery proposal by complaining, "[T]his is the largest spending bill in history." Congressional Republicans made similar complaints again and again throughout this week, but such rhetoric reveals an obvious ignorance of economic policy. Indeed, the size of the spending bill is not arbitrary, but rather is based on the current and expected gap between the nation's economic capacity and its actual economic output. As the Center for American Progress explained, "We are now in a situation where the private sector is unable -- or unwilling -- to use all of the available productive capacity: able people aren't working, machines sit idle, and cubicles stand empty." As a result, there are "millions of families who are cutting back due to layoffs, fear of layoffs, lower home values, or reduced retirement savings," and "demand for goods and services in the entire economy falls." As demand falls, companies are forced to cut back production and employment further, causing additional decreases in demand. Nobel Laureate Paul Krugman explains that economists generally find that every "excess point" of unemployment above the rate that is expected in a healthy economy leads to 2 percent gap between the nation's actual economic output and its potential economic output. To prevent this gap from increasing indefinitely, the government must step in to temporarily increase demand and close the nation's economic output gap. Because unemployment is so high and demand continues to spiral downward, the current package before Congress -- if anything -- is too small.
IT SHOULD LAY THE FOUNDATION FOR LONG-TERM GROWTH: Conservative policymakers and uninformed members of the traditional media suggest that the current economic recovery package is not "stimulative" because it includes spending on public welfare programs that have both short-term and long-term benefits. They argue that relying on tax cuts would provide fast-acting and long-lasting stimulative effects. In reality, tax cuts are less stimulative than public spending. Further, cutting taxes -- unlike spending on social programs -- permanently increases the budget deficit. Instead, and as the current recovery package is slated to do, investment in America's future energy, health care, and education infrastructure puts Americans to work now and yields economic, environmental, and social benefits for years to come. While conservatives characterize the effects of such spending as being "too slow," the current proposal is designed to be fast-acting, but also maintain large (and needed) stimulative benefits through 2010. Unfortunately, a group of moderate senators, led by Sens. Ben Nelson (D-NE) and Susan Collins (R-ME), aim to cut at least $80 billion from the the recovery package with large cuts to science, agriculture, energy, and education.
--americanprogressaction.com
@Foxfyre,
Foxfyre wrote:Anybody who has spent any time reading Charles Krauthammer knows that he is not any kind of idealogue...
Bwa ha ha ha ha ha ha ha ha ha ha!
Thanks,
Foxfyre, that was the best laugh I've had all day.
@Foxfyre,
Foxfyre wrote:
Quote:"A failure to act, and act now, will turn crisis into a catastrophe."
-- President Obama, Feb. 4.
Catastrophe, mind you. So much for the president who in his inaugural address two weeks earlier declared "we have chosen hope over fear." Until, that is, you need fear to pass a bill.
Are you reading the same news as I am? Are you seriously denying the economy is in an acute crisis? The biggest in a generation?
Here - from the news today:
Employers slash 598,000 jobs in Jan., most since '74
"Recession-battered employers" eliminated 598,000 jobs in January,
the most since the end of 1974. The unemployment rate catapulted to 7.6 percent:
the highest since September 1992.
Quote:The grim figures were further proof that the nation's job climate is deteriorating at an alarming clip with no end in sight. [..]
The latest net total of job losses was far worse than the 524,000 that economists expected. Job reductions in November and December also were deeper than previously reported. [..]
All told,
the economy has lost a staggering 3.6 million jobs since the start of the recession in December 2007. About one-half of this decline occurred in the past three months.
The Republicans are acting like Nero when Rome was burning. Fiddling on about the indignancy of a 1% of the bill here, 2% there being spent on things they dont like, while the economy is collapsing.
@Foxfyre,
Foxfyre wrote:this terrible bill includes huge expenditures that won't be restricted to just the current 'emergency' but will saddle us and our children for decades or generations to come.
Is this a joke? Are you aware what exactly the Republicans proposed as alternative to the stimulus bill? That "American Option" amendment that 36 out of 41 of them
voted for this week, which had no spending, just tax cuts?
This is what that plan would have enacted, according to
this summary by its sponsor Sen. Jim DeMint. Italics and underlining are all his:
Quote:- Permanently repeal the alternative minimum tax once and for all;
- Permanently keep the capital gains and dividends taxes at 15 percent;
- Permanently kill the Death Tax for estates under $5 million, and cut the tax rate to 15 percent for those above;
- Permanently extend the $1,000-per-child tax credit;
- Permanently repeal the marriage tax penalty;
- Permanently simplify itemized deductions to include only home mortgage interest and charitable contributions.
- Lower top marginal income rates " the one paid by most of the small businesses that create new jobs " from 35 percent to 25 percent.
- Simplify the tax code to include only two other brackets, 15 and 10 percent.
- Lower corporate tax rate as well, from 35 percent to 25 percent.
Seriously - and you dare to lecture the
Dems about wanting to saddle up the next generations with debts?
Are you completely ... ok, let me not finish that sentence. The chutzpah...
@nimh,
What the **** kind of NEW jobs will that create?
That is an example of a spending bill that should be outside the stimulas.
@nimh,
You are so right. The Rep tax cuts are permanent, and will therefore effectively cost much more than the outlays, etc., under the Dem bill. Further, the national debt will rise to astounding levels.
@Woiyo9,
Even things like the increase in food stamps, while it will be spent, I'm worried that the supermarkets will simply hold on to the increase in money. They have extremely tight profit margins as it (1%) and they're losing money right now.
I see food stamps money going from the government to the grocery store chains and stopping.
The focus needs to be on maintaining current jobs (and creating new ones) and fixing housing prices. THAT's IT.
Everything else in these bills can be brought before the congress and passed in a seperate bill. There are good programs in there, and I'm sure they'll pass w/o much of a problem, but take them out of the stimulus bill.
@Woiyo9,
Woiyo9 wrote:
What the **** kind of NEW jobs will that create?
That is an example of a spending bill that should be outside the stimulas.
What do you mean 'new' jobs? Do you have any idea how many construction jobs 6 billion dollars of spending will create?
Cycloptichorn
@Woiyo9,
Woiyo9 wrote:
What the **** kind of NEW jobs will that create?
What do you mean? Who do you think will do all that work? You think that the current construction workers will squeeze the extra billions-worth of work into a free Friday afternoon? NEW people will need to be hired. Creating jobs - it's stimulus pur sang.
@Advocate,
Advocate wrote:Here is the unvarnished truth.
Blah, blah, blah
--americanprogressaction.com
American Progress Action Website wrote:The Center for American Progress Action Fund is headed by John D. Podesta, former chief of staff to President William J. Clinton and a professor at Georgetown University Center of Law.
so you take a quote from a liberal think tank, run by Obama's transition team lead and then tout it as "the unvarnished truth".
Here's my unvarnished truth from the Heritage Foundation...
Quote:Welfare Spendathon: House Stimulus Bill Will Cost Taxpayers $787 Billion in New Welfare Spending
The recently passed U.S. House of Representatives stimulus bill contains $816 billion in new spending and tax cuts. Of this sum, $264 billion (32 percent) is new means-tested welfare spending. This represents about $6,700 in new welfare spending for every poor person in the U.S.
But this welfare spending is only the tip of the iceberg. The bill sets in motion another $523 billion in new welfare spending that is hidden by budgetary gimmicks. If the bill is enacted, the total 10-year extra welfare cost is likely to be $787 billion.
The claim that Congress is temporarily increasing welfare spending for Keynesian purposes (to spark the economy by boosting consumer spending) is a red herring. The real goal is to get "the camel's nose under the tent" for a massive permanent expansion of the welfare state.
<<<snip>>>
The welfare provisions in the Senate stimulus bill are very similar to those in the House bill. Both bills use the idea of economic stimulus as a Trojan horse to conceal massive, permanent increases in the U.S. welfare system. The goal of the bills is "spreading the wealth," not reviving the economy.
@slkshock7,
I can't get over your guys. It was the right that caused this mess, and it is the right that seems kill off any type of recovery.
@nimh,
Nimh wrote:Are you reading the same news as I am? Are you seriously denying the economy is in an acute crisis? The biggest in a generation?
Here - from the news today:
Employers slash 598,000 jobs in Jan., most since '74
Not sure what Foxfyre will say, but I'll say "yes, I am denying that the economy is in an acute crisis?" Sure we are in a recession and that means folks will lose their jobs....but we've weathered recessions periodically throughout our 200-year history....nothing new or especially alarming about that.
So...what does the loss of 598,000 jobs mean anyway? How many of these folks turned around and found new jobs right away? Like most statistics, raw figures can be staggering but, in truth, offer little but shock value. The real statistic I should think is the unemployment rate. Today it is 7.6% which sounds ominous because its highest its been in a decade, but in reality it's been much higher this generation...
Below is a graph of unemployment from 1970 until now from the
Bureau of Labor Statics
From this chart I conclude that having unemployment rates of 7.6% or greater are quite common. The chart shows that the nation has survived unemployment rates of 7.6% or greater several times over the past 38 years.
Yet, we've never before engaged in such mass hysteria and completely let loose the reins of reason and common sense like Congress and this new Administration has.
@Advocate,
Advocate wrote:I can't get over your guys. It was the right that caused this mess, and it is the right that seems kill off any type of recovery
No, the Dems were equally culpable, as were the banks themselves, and yes, I'll give you that the Repubs deserve blame as well.
But we are not against recovery....we just believe in the power of the market and that it will heal best by simply permitting it to recover at its own pace and in its own time. Pouring money into the economy to help it recover has about as much chance of success as preventing the earth from rotating by running west really, really fast.
@slkshock7,
slkshock7 wrote:
Nimh wrote:Are you reading the same news as I am? Are you seriously denying the economy is in an acute crisis? The biggest in a generation?
Here - from the news today:
Employers slash 598,000 jobs in Jan., most since '74
Not sure what Foxfyre will say, but I'll say "yes, I am denying that the economy is in an acute crisis?" Sure we are in a recession and that means folks will lose their jobs....but we've weathered recessions periodically throughout our 200-year history....nothing new or especially alarming about that.
So...what does the loss of 598,000 jobs mean anyway? How many of these folks turned around and found new jobs right away? Like most statistics, raw figures can be staggering but, in truth, offer little but shock value. The real statistic I should think is the unemployment rate. Today it is 7.6% which sounds ominous because its highest its been in a decade, but in reality it's been much higher this generation...
Below is a graph of unemployment from 1970 until now from the
Bureau of Labor Statics
From this chart I conclude that having unemployment rates of 7.6% or greater are quite common. The chart shows that the nation has survived unemployment rates of 7.6% or greater several times over the past 38 years.
Yet, we've never before engaged in such mass hysteria and completely let loose the reins of reason and common sense like Congress and this new Administration has.
No we are hurting economically right now, but so far I am seeing no 'acute crisis' out there.
Unemployment claims are up because credit is frozen and construction is correspondingly slowed to a crawl, but most of the newclaims seem to be filed by 'on call' workers who work as they are needed for jobs. When the economy was booming or at least healthy which has been most of the time since the so-called "Reagan Revolution"--the normal periodic recessions have been fairly shallow and short lived except for the 9/11 exacerbated one and we even came out of that quite effectively without draconian government intervention. Meanwhile most of those 'temp' workers were able to work fairly steadily much of the time but, until the jobs open back up, they're drawing unemployment.
In my work I see a lot of bottom lines and most are down this year, but no wholescale layoffs or cutting of permanent jobs. New hires are scarce and, as I said, those temporary jobs are harder to come by due to the housing slow down. If Congress would just address THAT to free up credit and get the housing market moving again, I think we would pull out of the recession just fine and in good shape. It was Congress who got us into this credit mess with their hairbrained policies, and they can get us out by reinstating sensible policies.
My fear is that trying to spend our way out of the mess instead of allowing the private sector to right itself is going to create a much more serious mess for folks on down the road.
(P.S. Those hairbrained policies were mostly leftist policies, but the right bears equal blame for not raising a bigger stink about them.)
@slkshock7,
The problem isn't the 7.6% current rate slk. It is the rate projected based on the job loss we are seeing. Announced job losses in January probably won't occur until Feb or later so the rate can only go up from here. Large companies are required to give notice about impending lay offs several weeks before they occur.
The hope is unemployment peaks about 9% but at the rate its going we could see 11% before we start to come out of the recession.
@parados,
Thanks, Parados,
But we've seen 11% unemployment in the past 30 years as well. At that time, we didn't see fit to spend ourselves out of it....
Recessions come...recessions go....let's not make more of it than there needs to be.
@parados,
Actual job loss data, not projected -
Get with the ******* program, Conservative idiots. This isn't some run-of-the-mill slowdown.
Hey silk - you don't know what you're talking about, period. There's a reason actual economists are worried about this, and Republican pundits are not. And that reason is they know how to read data and you morons don't.
Cycloptichorn
@Cycloptichorn,
Cyclops, you have to use percentages, you can't use ACTUAL job losses.
You're smart enough to know this, which means you're being intentionally dishonest by posting that.
I hate seeing people I generally agree with sink to these levels to try 'win' arguments.
@maporsche,
maporsche wrote:
Cyclops, you have to use percentages, you can't use ACTUAL job losses.
You're smart enough to know this, which means you're being intentionally dishonest by posting that.
I hate seeing people I generally agree with sink to these levels to try 'win' arguments.
Uh. Why do you have to use percentages? We haven't added a significantly huge number of jobs during that time period that would cause such a graph to be unrepresentative. You can also compare the slope of the graph no matter how many people are employed in toto.
C'mon, man
Cycloptichorn
@Cycloptichorn,
You're comparing actual job losses, w/o taking into account the actual number of jobs.
The number of actual, total jobs in 1990 is not equal to the number of jobs in 2008/9.
For example.
Lets say that there are 1000 jobs in 1990 and 200 jobs are lost. That 's a loss of 20%
In 2008 there are 10,000 jobs and 1,000 are lost. Thats' a loss of 10%.
Your graph would show the job loss being 200 in 1990 and 1000 in 2008 which is a large increase, until you look at the percentages.
I KNOW you're smart enough to know this.
