Krugman: Without More Stimulus, Joblessness Is Here To Stay
Paul Krugman explains why we can't settle for stabilizing the economy, and says unless there's a bigger economic stimulus package, high unemployment is here to stay for a long, long time:
The effects of the stimulus will build over time — it’s still likely to create or save a total of around three million jobs — but its peak impact on the growth of G.D.P. (as opposed to its level) is already behind us. Solid growth will continue only if private spending takes up the baton as the effect of the stimulus fades. And so far there’s no sign that this is happening.
So the government needs to do much more. Unfortunately, the political prospects for further action aren’t good.
What I keep hearing from Washington is one of two arguments: either (1) the stimulus has failed, unemployment is still rising, so we shouldn’t do any more, or (2) the stimulus has succeeded, G.D.P. is growing, so we don’t need to do any more. The truth, which is that the stimulus was too little of a good thing — that it helped, but it wasn’t big enough — seems to be too complicated for an era of sound-bite politics.
But can we afford to do more? We can’t afford not to.
High unemployment doesn’t just punish the economy today; it punishes the future, too. In the face of a depressed economy, businesses have slashed investment spending — both spending on plant and equipment and “intangible” investments in such things as product development and worker training. This will hurt the economy’s potential for years to come.
Deficit hawks like to complain that today’s young people will end up having to pay higher taxes to service the debt we’re running up right now. But anyone who really cared about the prospects of young Americans would be pushing for much more job creation, since the burden of high unemployment falls disproportionately on young workers — and those who enter the work force in years of high unemployment suffer permanent career damage, never catching up with those who graduated in better times.
Even the claim that we’ll have to pay for stimulus spending now with higher taxes later is mostly wrong. Spending more on recovery will lead to a stronger economy, both now and in the future — and a stronger economy means more government revenue. Stimulus spending probably doesn’t pay for itself, but its true cost, even in a narrow fiscal sense, is only a fraction of the headline number.
O.K., I know I’m being impractical: major economic programs can’t pass Congress without the support of relatively conservative Democrats, and these Democrats have been telling reporters that they have lost their appetite for stimulus.
But I hope their stomachs start rumbling soon. We now know that stimulus works, but we aren’t doing nearly enough of it. For the sake of today’s unemployed, and for the sake of the nation’s future, we need to do much more.
Obama fires Howard Dean and hires Rahm Emmanuel.
Obama hires Larry "derivatives" Summers instead of Paul Krugman, or some other progressive who wrote prophetically about the U.S. house of cards (economy) years ago.
Methinks we are screwed! Man I hate these DLC assholes.
If I were a psychopath, I would join the republican party, and get in on the gravy train taking the Teabircher morons to the cleaners.
.
He was removed from his position as democratic chairman after getting democrats - including Obama - elected. Remember? And it's the president who makes that call!
If I were a psychopath, I would join the republican party, and get in on the gravy train taking the Teabircher morons to the cleaners.
... the cold shoulder Obama gave him was quite disgraceful though.
Probably his boy Emmanuel was all too exciting about the prospect of pulling another Bill Clinton on the unsuspecting liberals. They must be mortified over at the white house now that we're paying attention this time around...
Yes, very disgraceful indeed.
Dr. Dean is a very good man, who truly cares about others - which is what the people thought they were voting for in Obama.
My grandfather always said "you can judge people by the company they keep." Rahm, Summers, Geithner......, I am not impressed.
If I were a psychopath, I would join the republican party, and get in on the gravy train taking the Teabircher morons to the cleaners.
He obviously isn't corporate owned,
Sounds like a reason to enlist in the military, doesn't it? Better (and less upsetting) than reinstating the draft!
"Courtesy is owed. Respect is earned. Love is given." --Unknown author, found in Guide to Texas Etiquette by Kinky Friedman
here in Australia is continuing its stimulus push without adding too much to the public debt and it is being applauded by the international community as a step in the right direction. Here in the land down under, we seem to have jumped over the hurdle that is called 'recession'. It would be nice to see our friends in the United States able to get over this without too many casualties as well.
We'd do a lot better if we could sent Murdoch back to you for a future draft pick...
"Parachutes are allowed in checked or carry-on baggage, but may not be worn in flight."
---Southwest Airlines
no thanks fastfeat. Couldn't you just shoot him out of a cannon into the Atlantic or something?
... you clean it ;-)
by flinging it over the fence.
illegal immigrants when it's the legal ones that cause us the most trouble...
"Parachutes are allowed in checked or carry-on baggage, but may not be worn in flight."
---Southwest Airlines
... I don't think the peeps at the Mayflower ever filled their visa applications. And the ones we label as "illegals" chances are can trace their family traces to before ours set foot on this continent.
It seems the winners, not only get to write the history books... but the dictionaries too ;-)
Yea man, stimulate this, bro.
My famous last words in 2000.
on California . . first objective, obliterate California's economy with the Enron Energy Weapon.
Repukes and bluedogs don't need no stimulatin, because they have all the money. Not their problem.
If I were a psychopath, I would join the republican party, and get in on the gravy train taking the Teabircher morons to the cleaners.
for when the next big shoes drop. They are scared out of their wits to loan money. How do we get job growth when you can't get a business loan?
Last time I checked there was about $317 billion still to be disbursed from the BS TARP money.
Almost half?
"I know that there are people who do not love their fellow
man, and I hate people like that! " ~ Tom Lehrer (1928 - )
I know he likes to model himself after Abe Lincoln, but President Obama is much more like Henry Clay. Compromise as much as possible, hoping to eek out bipartisan consent to cleverly worded legislation to help some people, but not really do the right thing. Henry Clay was the great compromiser, but eventually the Civil War had to be fought to end slavery anyway. And when President Lincoln had to fight the war, he fucking fought it.
Heh, not that it's his Constitutional role, but in our broken system as it is, President Obama ought to be telling the Blue Dogs, "Look, you're not the plurality in Congress. The Progressives are. You're all vulnerable in your gerrymandered districts, and it ain't gonna help if I show up to campaign against you in the primaries. You think we can't find another self-proclaimed Blue Dog who will vote with me if we can unseat you? Of course we can. So get in line, or I'll use the might of the bully pulpit to place you among the ranks of the unemployed."
Of course, as the Onion put it, Obama would try to negotiate with a wild fire to see if he could persuade it to stop spreading.
Everyone is equally entitled to the pursuit of happiness. Wasn't that once self evident?
ROFLMAO in a sad depressed kind of way.
If I were a psychopath, I would join the republican party, and get in on the gravy train taking the Teabircher morons to the cleaners.
...still wiating to hear what the GOP solution is to GOP created economic collapse.
IF you've got piles of money it's not an "economic collapse" .. it's a great opportunity to pick up some valuable assets at bargain basement prices.
Disaster Capitalism at its Best!
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
you can get the government to lend you cash at zero interest so you can go out on a nice shopping spree.
Of course you need a special American Express Platinum Well Connected account for that.
Obama Is Made of Clay
Mon, 11/02/2009 - 14:24 — Karen
_______________________________________________________________________
http://www.youtube.com/watch?v=IYmFL0RX5Lk&fe...
Diabolus est Deus Inversus
US has indebted itself to 98% of its GDP due to the last ($15 trillion) stimulus package. With another one, the US will have saddled every American with a $80,000 debt (or 200% of the GDP). Japan has a 200% debt but has cash on hand (unlike Americans).
Who actually benefits from these stimulus packages, really?
"We had lentils and cornbread last night…yum yum, and we’ll heat them up tonight as well. I did mention that my husband got his first paycheck last Friday. Sent from Heaven. We celebrated with brats and homemade kraut and hard rolls! Beats a t-bone any day in our book. Hubby is from Austria, so he can make some great kraut."
15 trillion? What? Where? The stimulus package was under 1 trillion. The total debt now is still around 10 trillion. The peak debt to GDP ratio was about 120% back around WWII. The school next door to my house would certainly have closed this year if it weren't for the stimulus package.
The debt is about 10-12 trillion, and 95% of it went to millionaires and the war profiteers. Who benefitted from that?
If I were a psychopath, I would join the republican party, and get in on the gravy train taking the Teabircher morons to the cleaners.
"What a whiny welfare biatch...Sounds like someone doesn’t know how to manage their money. I would bet they are making car payments and eat fast food at least 3 times a week. Probably have cable T.V. and deluxe cell phone plans. They probably get a new car like every two years..."
He originally said that this half-hearted effort would be insufficient. Too bad the first half went to the wrong people.
"Parachutes are allowed in checked or carry-on baggage, but may not be worn in flight."
---Southwest Airlines
Forget any stimulus, you are headed for Japan Redux, enact direct hire WPA 2.0.
End the wars and dismantle the Corporate Perpetual War Machine.
Break up the Too Big To Jail Banks, investigate the fraud, march the crooks off to the hoosegow.
End Corporate Welfare.
Reign in the Wall Street Mafia.
Do it all by next week.
---
Meanwhile watch John Pilger, Obama and Empire here
statusquObama, change you can only pretend in
About 3 billion people live on less than a dollar a day.
Kinda puts some things into perspective.
"I know that there are people who do not love their fellow
man, and I hate people like that! " ~ Tom Lehrer (1928 - )
We've been living beyond our means for decades and the chickens are coming home to roost, stimulus or no.
to two 'Thugs arguing about the finer points of Obama's failures. Gotta roll before I get an assault charge.
Be good all.
"Parachutes are allowed in checked or carry-on baggage, but may not be worn in flight."
---Southwest Airlines
from the National, Canada's nightly national news. This report on the US Economy is reported by Neil MacDonald (Norm's older, smarter and much more liberal brother, really). It's aboot 8 minutes long
The Economic Meltdown: One Year Later
me-oww!
Jesus, it is clear where all the talent in that family went.
Thanks for pushing the idiot brother on us, you Canadian a**holes ;-) J/K
he got Norm a newspaper job once, but it just didn't work out. Lucky Canada!
me-oww!
I did not know that, miss_kitty. The things I learn at C&L!
aboot?
eh?
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
j/k...I love my Canadians
Babe Bennet on Politics
Babe Bennet On Sarah Palin
me-oww!
Babe Bennet for Prime Minister! Yeah, baby!
ps, Canucks love you too, miss_kitty ;)
Seems odd to see news that isn't sensationalized or being spun towards a political or corporate agenda.
Canadian, eh?
do not operate under the assumption that their intended audience is a collective of drooling morons with the attention span of a fruit fly (and similar intellectual acumen).
They sound a little more fiscally conservative than Krugman. One thing I didn't see noted in the report, or in this discussion is anything about the policy of quantitative easing. The report notes that as America becomes less credit worthy, the interest it pays for money it borrows will go up. What is omitted is that interest on treasuries, which normally gets decided at auction markets, is kept artificially low by the Fed printing money to assume debt directly. Without that, I think that interest on treasuries would have gone up already.
...The reason we are stagnating is that noone wants to reveal which bank is a zombie-bank, Obama is not forcing them, and no credit is flowing. It's the Peel-the-band-aid-off-slowly remedy for a shit economy. I guess w're going to happy-talk our way out of this collapse.
I haven't found a job even before the crash!
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L.A.
As long as the unemployment rate is high, corporations can keep wages and benefits low. Without more disposable income, in the way of increased wages and benefits, our consumer based economy will continue to lag, assuring a high unemployment rate for the foreseeable future.
WE ARE STILL OUTSOURCING GOOD JOBS TO CHINA AND INDIA.
These lost jobs are not just people assembling widgets. They are managers, engineers, and MBAs as well. I heard a lawyer complaining today that he can not get work because it is being outsourced to India.
The only group that benefits from high unemployment is corporations. Unfortunately, they seem to have all the power right now.
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That's for sure.
because the contracts he helped transferring over to India are fully moved now, and his services are no longer needed. How does he like them apples?
After the humiliation and abuse that the engineering and trades sectors in this country, have been taking in the chin non-stop via outsourcing for the better part of the past 3 decades, I am not going to shed any tear to see MBA getting a taste of their own medicine.
Couldn't have happened to a nicer bunch... I say. Now if we could only outsorce CEOs and politicians, heck I am sure we can get a couple of indian dudes to write the same useless legislation as our entire legislative branch, and all for a couple of bucks a day... and the prints are ready first thing in the morning. The value proposition speaks for itself!
?
Given the underwhelming mastery displayed by a significant portion of MBAs I have interacted with, I am willing to go with that definition over the official title ;-)
coming.
Nope. They totally bought into that "greed is good" bullshit. Once you embrace that flaming turd philosophy, you are pretty much blind to reason, and screwed!
If I were a psychopath, I would join the republican party, and get in on the gravy train taking the Teabircher morons to the cleaners.
Before 90's
http://www.supermarketguru.com/public/images/...
After 00's
http://helpfredtimms.files.wordpress.com/2008...
I guess I should be crying instead of laughing..
From Thom Hartmann:
CIT Group, one of America's largest small-business lenders, said Sunday it's filing for bankruptcy and shedding 10 billion dollars in debt.
According to Friday's Wall Street Journal this will result in CIT providing 20% of its previous level of financial services to Middle America.
Any bankers replacing these services will demand higher levels of credit worthiness to be met by small business and less funds committed to these loans.
Adding to this, the assets of CIT in bankruptcy are the middle American loans outstanding that will be crushed by the bankruptcy process.
That will most likely result in an avalanche of middle American businesses declaring bankruptcy, and you and I lose the $2.3 billion we loaned them in the bailout.
Let's see. We loan money to our kids for college, and then change our bankruptcy laws so they can't ever, ever, ever throughout their lives get out from under that debt. Even bankrupt, they're stuck with it forever.
On the other hand, we give billions to banksters, and they just call a lawyer, file a paper, and the debt vanishes, leaving them with enough cash so they can pay themselves millions in pay and bonuses.
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
pre-positioned massively short on this baby.
Was $60 per share but that's the way it goes!
And another tent city pops up.
capital projects done now would be supported by both sides. Cheap loans could also be used to finance state and local government infrastructure projects.
tres sec k'thrugman or fed chief sir paul, but i cannot get with the spend more thing
bring back the manufacturning sector?
want to end the depression?
bring back tariffs to goods made by american companies in foreign countries
George W Bush governed like he owned the place. Obama governs like he desperately wants to make friends. The President should stop compromising and capitulating to these Republicans who want him to fail. The stimulus was too small, health care reform lost its momentum this summer, and the cash for clunkers success was too short. Those are republican victories and tomorrows elections will reflect it.
This is not my father's America
Greed is the only surviving "virtue" left , I think we're screwed folks .
Insanity , it is what it is , there is no understanding it .
If CEO's and upper management would take just 10% out of their exorbitant salaries (just like us in the trenches have already done when the economy crashed. I lost 8% myself) these companies might have more money in the salary pool to hire people with.
Stimulus funds are monies that the "everyman" has already contributed to by paying taxes, why does the "everyman" have to foot the bill twice?
Someone at the top needs to start feeling the pain too.
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