Breaking news?
Advertisement
FDRdog
Following: 3
Followers: 20
Posts
Comments & Recommends
- Location Nomadic
- Party Dem
- Politics Wouldn't be here otherwise.
Favorites
- Favorite Books Grimm's Fairy Tales was the first favorite.
- Favorite Quotes "It's turtles all the way down." "He did the wrong things badly." "There's more things told than are true, And more things true than are told." R. Kipling
Excuse me while I clutch my pearls and fall to the floor in a faint.
July 12, 2009 8:01 PM | Reply | Permalink
I would think that more than just the GOP would be opposed to the second stimulus.
If the first one is designed to last two years, and if it's true that only 6.8% have been spent so far, - then what exactly is the point of the second one?
Plus, Obama himself says the original stimulus is working "exactly" as planned.
If the above is true, than any reasonable person would ask "why".
July 12, 2009 8:02 PM | Reply | Permalink
The stimulus is working as planned: Romer and Bernstein had it all graphed out in their study that was released pre-Congressional stimulus vote. The only problem is they used the mainstream model (aka overly optimistic model). However, the study indicated that around Q3 of '09 we'd see some negligible effects. So, anytime now the unemployment rate should be going down. We shall see.
Also, it should be noted the Romer and Bernstein study planned for unemployment to peak at 8%. We are now close to 10%, so it should follow that their entire study is off by about 2% (that is of course assuming 10% will be the peak). Thus, more stimulus to counter that higher than expected job loss would be ideal. If we do nothing we can expect to have about 7.5% unemployment in Q3 of 2012 (again keeping with the study being off by 2%). I'd rather not have unemployment that high in 3 more years. Thus, more stimulus, please.
Get that 7.5% down to 5.5% as originally planned, or better yet, a healthy 4.5%, or an amazing 3.5% and it's smooth sailing.
Here is your proof that the Obama/Romer & Bernstein plan is, and always was, supposed to take effect over several years:
http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf
(Relevant graph is on page 5.)
July 12, 2009 8:23 PM | Reply | Permalink
In other words - the original stimulus was based on a mistake. So... would calling for the second one be an Obama admission of that mistake?
Because that's what everyone is going to think and say.
July 12, 2009 9:05 PM | Reply | Permalink
I would say it was the Democrat's inability to predict the future.
July 13, 2009 8:10 AM | Reply | Permalink
The original stimulus of $787 billion was a major step forward, but was probably too small. In Obama's defense, it's hard to see how he could have been granted a larger amount, given the entrenched opposition. Even so, it's probably worth waiting at least until late in the year to determine whether additional stimulus spending is needed, and if so, how much. I'm familiar with how the money was allocated in certain sectors of the economy involving science, and it is not surprising that effects are just now beginning to occur. Up to now, much effort has been spent to ensure that spending decisions were made as carefully as possible, to minimize waste. As an example, judgments among many competing applications for scientific funding require a few months for proper review. Now, many of those decisions have been made, and the money, having been awarded, will be flowing over the coming months.
I believe anyone hoping that the current stimulus will fail is bound to be profoundly disappointed, whether or not an additional package would turn out to provide further benefit.
July 12, 2009 9:27 PM | Reply | Permalink
I agree, overall I think the original plan was very good in it's implementation. However, I wanted more $$$ (around a trillion would've been better) and for it to be much faster from the get go. This would seem a good idea, in hindsight if nothing else.
The original Romer and Bernstein plan kicked into gear in Q3 2009, which is right now. So hopefully if things are working on schedule it should be any time now. The numbers may be off, but hopefully it should be on time.
July 12, 2009 9:33 PM | Reply | Permalink
I hope Obama will treat us as adults and explain their numbers were off and/or things were worse than expected. One is a mistake, one is a miscalculation. If he was mistaken, I hope he would act as any good adult and leader would, and admit it. Personally, no more the true cause I suspect the later will be the explanation.
I will say this- picking the mainstream model was a bad idea and a mistake, if true. Also, totally expected for political reasons (any politician would).
However, just because the numbers may have been off does not by any means suggest the stimulus was a mistake in theory. Implementation and planning? - I'll leave that for others to discuss.
I know I certainly had some disagreements about what should be in it and definitely wanted a bigger stimulus even then. I'm one of Krugman's "un-persons", I guess.
I think the next 2 to 3 months will be important and we'll see if unemployment goes down- this would suggest things are still on target but the numbers were off. However, you slice it we need more jobs- thus more stimulus. 7.5% in October 2012 is not a good thing, and that's being optimistic given how things are trending.
If unemployment doesn't start going down in the next 2 to 3 months, that too is a bad thing and could suggest the economy is much worse off than anyone could've reasonably predicted- definitely suggesting more stimulus is needed and perhaps, in more drastic means and through more drastic measures.
All of this is very wait and see. Also, imho.
July 12, 2009 9:27 PM | Reply | Permalink
Unemployment is generally considered a lagging indicator, and thereofore likely to peak after an economic rebound has already started in other sectors of the economy such as consumer spending and reductions in inventory. As I understand it, most economists, including those with optimism about the current level of stimulus spending, expect unemployment to continue rising for a while, and probably not significantly reverse course until sometime in 2010. It would be gratifying to see a reversal this year, but even in its absence, it might be best to monitor the other indicators before drawing conclusions.
July 12, 2009 9:56 PM | Reply | Permalink
Romer & Bernstein put the study out, not me. I'm not saying it should go down much (a fraction of a percent a month, maybe less), but it should a little if the timing is right. Maybe it will be next year, but hopefully R & B got the timing right and we'll be seeing something soon. Perhaps, that is to optimistic and perhaps I am seeing Q3 of 2009 as to crucial. However, that seems to be where things take off in their model- I guess I'm hoping for the same in reality.
Thanks for the reality check though. :)
July 12, 2009 10:30 PM | Reply | Permalink
er, too.
July 12, 2009 10:31 PM | Reply | Permalink
oh, and just to be clear- for me unemployment is really the only indicator to go off of. The reasoning for this is because that's pretty much the one indicator (besides interest rates) that really mean anything to average working folks like me. When unemployment goes down that will mean things are better for myself and my friends (many of whom are out of work or know someone who is) because, yes, Virginia the economy really is better. When the lagging indicator says it's real, it's real. Does that make any sense?
July 12, 2009 10:39 PM | Reply | Permalink
for me unemployment is really the only indicator to go off of. The reasoning for this is because that's pretty much the one indicator (besides interest rates) that really mean anything to average working folks like me.
I can understand why it would be the most meaningful measure of economic progress. My only point (or rather the point made by expert economists, not me) is that an "indicator" is useful as a marker of where the economy is headed. If they seem to be going well by late 2009, that would augur well for job growth in the following months. If they are not going well, it would be a signal to think of increasing the stimulus without waiting for unemployment to serve as a guide.
July 12, 2009 10:51 PM | Reply | Permalink
I'll agree with that. I think that's a good timeline to go off of as well. I hope they are on the ball!
July 12, 2009 11:24 PM | Reply | Permalink