Three Is The Magic Number
Paul Krugman opines that we might be well on our way to a third depression.
It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.
Krugman regrets that policy makers (Europe and the US) seem more intent on resurrecting the corpse of Herbert Hoover rather than spend, spend, spend. Krugman writes that even the financial markets understand that spending is equally as important as long-term financial stability. Sadly, this is not the road that is being chosen and, now with failure as an option, who will suffer?
The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.
Tags: Economy
I’m trying to imagine a possible pretext for reducing the national debt at this time and the only thing I can come with is that it might be good to reduce the debt in order to borrow tons on money and put a real jobs/stimulus package in place.
There’s no reason you can’t make cost-cutting reforms to agencies, even while simultaneously providing massive temporary relief and stimulus payments. Even though current deficits would still go up, at least when the temporary spending ends you are in better fiscal shape, and you can point to your fiscal prudence.
Obama is missing a chance to defend himself politically and fiscally by not implementing a review program like Al Gore’s Reinventing Government, which actually did reduce the number of Federal employees.
But when the relief spending and the stimulus spending are all mushed together with general program bloat on the grounds it will all help the economy, no wonder it is hard to defend.
When addressing a fundraiser for embattled incumbent Senator Russ Feingold in Milwaukee, Biden told an audience to get used to high unemployment, because the jobs lost in the recession aren’t coming back:
Vice President Joe Biden gave a stark assessment of the economy today, telling an audience of supporters, “there’s no possibility to restore 8 million jobs lost in the Great Recession.”
Appearing at a fundraiser with Sen. Russ Feingold (D-Wisc.) in Milwaukee, the vice president remarked that by the time he and President Obama took office in 2008, the gross domestic product had shrunk and hundreds of thousands of jobs had been lost.
“We inherited a godawful mess,” he said, adding there was “no way to regenerate $3 trillion that was lost. Not misplaced, lost.”
(a little more on-point than his dumbass coments in the custard shop)
So have Republicans successfully starved the beast?
Biden is right of course, but is going to be pretty tough sledding to run against GWB again in 2012.
Then wait until “HCR” kicks in and starts sucking hundred’s of billions of more dollars out of consumer’s pocket while health care costs continue to spiral uncontrolled.
Happy days are here again.
I’ve got something you can suck out of my pocket.
The United States is the stupidest, most self-defeating G7 country in the world.
http://www.economist.com/blogs/freeexchange/2010/06/labour_markets_0
Our higher than average number of wingnuts explains a lot.
Pete Peterson and the defict hawk ‘catfood’ commission had a set of nationwide town halls this weekend, hilariously (sadly?) retold by digby, Susie Madrak and David Dayen. The public ain’t buyin’ what the billionaire club is selling.
Without Obama and Congress getting serious about jobs, the GOPerheads will use the sky-is-falling-scary-deficit meme to strip away the social safety net (without touching the Pentagon’s budget or its war supplimentals). And especially when 2012 rolls around, the right will blame the general misery on the DEMs for their failure to bring the economy around.
The DEMs can’t figure it out..even as the WH and powerful Senate horsetraders ensured that the Wall Street reforms were too weak to stop much of the shenanigans. The government still ultimately has liability for TBTF banks.
–hey Obama, the Federal Reserve is mandated to worry about unemployment wqually as much as the health of the markets – how about a little visit to Mr. Bernanke on our behalf?
Obama was slapped down hard, and left isolated & ignored at the G8/G20 — the only “leader” of a serious country who is still begging for more unsustainable borrowing and more damaging big government spending.
So if all the other countries told you to jump off a cliff, would you do it?
Wow. What a great feature!! Up to the minute Fox News banner crawls. I don;t know about anyone else, but that’s why I read a liberal blog.
This problem can’t be solved with just spend, spend, spend. We threw money at wall street with the first stimulus, and it hasn’t really done anything. Unemployment is still hovering right below 10%; at least until the census jobs are gone. If we are going to print more money, it has to be put into manufacturing. You have to produce your way out of a recession/depression.
One thing I’d like to see, is a jobs bill with a moratorium on the corprate tax for revenue generated from new factories and plants. We need incentives to put america back on top in manufacturing. This service based economy that we have created is not self-sustaining.
I AM LIVID–I just found out my 3600/yr HC deductible, has now gone to 10K per year. Why am I working? And work NEVER had a meeting or memo to tell us all this great news. Oh, and that starts July 1st. Watch out folks……
When the capital gains/dividend tax cut expires and floats up to 20% – assuming Obama keeps his pledge – that will provide more incentive for business to avoid the tax by reinvesting the money in their businesses and job creation instead of cashing out to individual shareholders (i.e., executives).
Joanne,
Don’t you work for your husband? Or did I miss something?
5% is going to cause the job creation that we need right now? I really doubt that.
Jason: I read a liberal blog so the geniuses who visit can lecture us from their deep understanding of economics.
anon-you sure did miss something. We’re self-employed–so my other job is where I draw the full-time benefits. Healthcare costs being a huge downside to being self-employed. I work alot.
FY2007 $160 billion budget deficit — Bush and Republican Congress
FY2008 $454 billion budget deficit — Bush and Democratic Congress
FY2009 $1.4 TRILLION budget deficit — Obama and Democratic Congress
FY2010 $1.8 TRILLION projected budget deficit — Obama and Democratic Congress
clearly it is all Bush’s fault.
Nice try. I know it’s wingnut religion to believe that deficits began on January 20, 2009 but the bulk of the deficit is due to Bush’s policies – war, unfunded tax cuts and the economic disaster he caused. Bush’s numbers look low because he just didn’t count the cost of the wars in his numbers. In Republicanland, wars are free.
Chart here.
And let’s not forget Republicans started with a surplus… then pissed that away, then started borrowing, and pissed that away, then deregulated the banking industry, which pissed everything else away…. It is the Republican’s fault…
Ish, if your sig other bought items in your name, spending money you didn’t have, you would have to borrow to foot the bill … too…
It is the Republican’s fault.
He even said so himself…..
http://kavips.wordpress.com/2010/06/30/inside-joke/