“Economy in Free Fall”; More Stimulus Needed
By Matthew Rothschild, March 6, 2009
That thud you just heard was the economy dropping off the table.
The just-released statistics showing unemployment hitting 8.1% is a nasty indicator of what people already understand: that we’re in a heap of economic trouble.
All told, we’ve lost 4.4 million jobs since the recession started.
We’ve lost 3.3 million jobs in the last six months alone, and we’re likely to keep losing at this pace for several more months to come, until some of that Obama stimulus money kicks in.
The problem is, there’s not enough of that money to go around.
Obama keeps saying his plan will “save or create” 3 to 4 million jobs.
Saving jobs won’t help any of those 12.5 million who are officially unemployed, or the millions more unemployed and discouraged workers who aren’t even in that stat.
Even if Obama created all of those 3 to 4 million jobs, that wouldn’t be sufficient to make up for the jobs lost already or those that are likely to go the wayside in the treacherous months ahead.
And that’s not even accounting for the increased number of jobs the economy needs to create just to tread water with the increased number of available workers.
“In order to simply keep up with population growth, the country would have needed to have added an estimated 127,000 jobs every month over this period, for a total gain of 1.8 million jobs. In other words, the economy is currently approximately 6.2 million jobs below where it would need to be simply to have maintained pre-recession rates of employment for the country’s workforce,” as Heidi Shierholz of the Economic Policy Institute points out.
Go to EPI’s website for a scary graph of the current unemployment situation versus previous ones. Today’s is much steeper.
The outlook is bleak.
“The economy is in free fall with no obvious brakes in place,” says economist Dean Baker, co-director of the Center for Economic and Policy Research.
In doing his budget and stimulus package, Obama had assumed that unemployment would hit 8.5 percent in the fourth quarter. Those forecasts “now look impossibly optimistic,” says Baker. “The unemployment rate is likely to hit 8.5 percent by March and will almost certainly cross 9 percent by the early summer. Without substantial additional stimulus, it could cross 10 percent by year-end.”
That’s why Obama is going to have to go back to Congress for another stimulus package in the next few months.
It should be harder then for the Republicans to keep opposing the only procedure that can get the economic patient breathing again: the fiscal paddles.
But I expect the Republicans will stay on script because, as their leader, Rush Limbaugh, says, they want Obama to fail. And they’d rather have a depression than admit that the government needs to intervene in the economy.
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Comments
Uhh, Jon...there's no mangling on my part; I'm only responding to the words you wrote. If you don't like the answers, then don't ask the questions.
First off...that pressure you say that Barney Frank put on corporations to grant low-interest loans to poor people?? Never happened. First, the Republicans were in charge of Congress for 12 years prior to the Democrats taking over in 2006, and that would make Rep. Frank part of the ranking minority. Secondly, the fact remains that most of the loans given to low-income folk due to the conditions of the Community Reenvestment Act did NOT require banks to loosen their standards of lending in any way or to require them to load themselves up in derivatives or sub-prime loans....in fact, the biggest players in the sub-prime and derivative markets were the banks LEAST likely and LEAST affected by the CRA.
Also, you tend to forget that most of the CRA was simply gutted by both the Republican dominated Congress and the Bush Administration (with the usual connivance from conservative and pro-corporate Democrats) by simply allowing banks to throw toxic junk loans at poor and working folk disguised as cheap loans, then use the usual "bait-and-switch" tactics to force usurious interest payments out of them. Naturally, the banks not only got to extort them out of their hard earned cash and foreclose on their homes after looting them, but they got the additional propaganda advantage of passing blams on the very people they rooked for "forcing them to take those loans".
The rest of your nonsense can be easily dispatched.
You assume that I am an uncritical support of Obama...which I most certainly am NOT. I happen to be quite critical of Obama's policies....but from the LEFT rather than the Right. That I am an opponent of right-wing Republicanism is a given; but that doesn't mean that I have to be an automatic mouthpiece for the Democrats or for the Obama administration. I speak only for myself, and no one else.
Funny how you make the claim that I shouldn't trash the Bush policies of survelliance of "terrorist contacts" when Obama is, according to you, doing the same thing....but I say to that that there are far more constitutional and far less intrusive ways within intelligence gathering to achieve that goal. Reckless, runaway wiretapping of American citizens whose only crime is to have Islamic surnames, followed by secret arrest, torture, detention without any hint of due process, rendition to foreign states for even more torture, followed by a tribunal which gives the "suspect" no chance of a valid defense....you may call it adequate, but I call it totalitarian and totally unecessary....and an affront to the rule of law.
Oh...and I am well aware that Obama got elected as much from the largesse of corporate America as he did from the populist uprising of the majority of Americans....all the more reason why it is important to have a genuine Left opposition that keeps him and the Democrats honest. But, I guess that you think that only your side has the right to oppose Obama's policies...right??
As for your lecturing me about accepting opposing views....oh please, spare me. I don't know you, since I only signed up for this blog this morning, so I am unaware of your regular posting. Problem is, when I see a person posting to a progressive blog like "The Progressive" spouting what are mostly right-wing talking points that could have been spoken by the likes of Sean Hannity and Rush Limbaugh (and then goes on to directly defend Rush's words verbatim)...well, that tends to raise my "troll" meter. I'll give you the benefit of the doubt there and take back my "troll" remark...but that doesn't mean that the rest of your rant isn't fundamentally right-wing claptrap....regardless of how often you post to this magazine blog. The fact that you do deviate slightly from the usual Republican line (corporate statist not quite the same as "socialist"??) doesn't make your points any less immune to criticism.
Tell you what, Jon...let's agree to disagree.
Anthony