The same people who insisted the first stimulus package was plenty (remember that famous "bipartisan" compromise?) and that the economists who said otherwise (Paul Krugman, Nouriel Roubini, etc.) were overreacting now quietly agree: It really wasn't enough. It wasn't enough, and now it will be even more politically difficult fr Obama to go back and ask for more - just as Krugman warned.
Despite signs that the recession gripping the nation's economy may be easing, the unemployment rate is projected to continue rising for another year before topping out in double digits, a prospect that threatens to slow growth, increase poverty and further complicate the Obama administration's message of optimism about the economic outlook.
The likelihood of severe unemployment extending into the 2010 midterm elections and beyond poses a significant political hurdle to President Obama and congressional Democrats, who are already under fire for what critics label profligate spending. Continuing high unemployment rates would undercut the fundamental argument behind much of that spending: the promise that it will create new jobs and improve the prospects of working Americans, which Obama has called the ultimate measure of a healthy economy.
"Our hope would be to actually create some jobs this year," Obama said in an interview with The Washington Post in the days before taking office.
Obama has defended his economic approach -- which includes the $787 billion economic stimulus plan and record investments in health care, alternative energy, education and job training -- as necessary to stabilize the shaky economy and point the way to job growth.
So far, the White House has counseled patience even as the political debate surrounding its economic policies grows more urgent. Officials point out that job growth will not come until robust economic expansion takes hold, which they expect will happen as stimulus funding works its way through the economy. Still, the flagging job market is likely to stir calls for further stimulus efforts as polls show voters growing increasingly wary of federal spending in the wake of a costly series of financial- and auto-industry bailouts and amid current efforts to expand health-care coverage to the uninsured, which is estimated to cost at least $1 trillion over the next decade.
With many forecasters projecting unemployment to remain above 10 percent next year and not return to pre-recession levels of roughly 5 percent for years after that, Obama is likely to be confronted with defending the effectiveness of his economic policies as the nation endures its worst employment situation in a generation.
Analysts say the high levels of joblessness would be accompanied by increases in child poverty, strained government budgets, and black and Latino unemployment rates approaching 20 percent.
"I find it unfathomable that people are not horrified about what is going to happen," said Lawrence Mishel, president of the Economic Policy Institute. "I regard all this talk about how the recession is maybe going to end, all the talk about deficits and inflation, to be the equivalent of telling Americans, 'You are just going to have to tough it out.' But we're looking at persistent unemployment that is going to be extraordinarily damaging to many communities. There is a ton of pain in the pipeline."
The final federal benefits extension, the one that's the end of the line? They make you prove you're looking for work and require you to accept any job they find that pays as much as your unemployment check.
You know, as if it's your fault you're unemployed during a major recession and you're just too lazy to look.
I guess that was part of the "bipartisan" solution. You'd think they'd be smart enough to figure out that if they're funding a third benefits extension, duh! It's because there aren't any jobs. On the other hand, you get to brag to the voters back home how you're making those bums pay - and in addition, you get the sheer fun of kicking people when they're down. So there's that, too!
10th Anniversary Fundraiser: