November 30, 2009

It's like deja vu all over again. Despite the fact that we know the causes of deficits are more important than the actual deficits, despite the fact that most top economists are calling for more economic stimulus and jobs programs, the New York Times has raised the anti-deficit banner in much the same way they did the "weapons of mass destruction" rationale for invading Iraq. (And look how well that all turned out!) This, of course, from the same paper who looked away while Bush trashed the economy.

And now our anti-deficit president's going to do another symbolic tour - in Allentown, of all places. Too, too ironic!

WASHINGTON — As Democrats renew their push to create jobs, they are at odds over the timing, cost and scope of additional measures, with the White House’s concern about high budget deficits pitted against the eagerness of many in Congress to spur hiring before next year’s elections.

After months in which his focus has been on a health care overhaul and foreign policy issues, President Obama will pivot later this week to the economy, convening a White House forum on Thursday to discuss ideas for job creation and then traveling to Allentown, Pa., for his first stop on a “Main Street Tour.”

Congressional Democrats return from a holiday break intent on packaging new proposals for tax incentives and construction projects to promote employment, with the House, where every member is up for re-election next year, on a much faster track than the Senate or the White House.

While the political rationale for additional government action is clear, it is an open question whether it would have any substantial economic effect. Still, the impetus for the activity will be underscored on Friday when the government releases figures for job losses and the unemployment rate for November.

With joblessness, which stood at 10.2 percent in October, likely to remain high through 2010 even as the economy recovers, the stage is set for what could be a yearlong tussle between deficit reduction and government incentives for job creation, and between the politics of Wall Street and Main Street.

An "open question" on whether it would have "any substantial economic effect"? Gee, you'd think a New York Times reporter would read Paul Krugman at least once in a while.

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