Forging Ahead on the Economy
President Obama is expected to propose a new economic aid package next week to help keep the economic recovery going. Unfortunately, the aid will reportedly consist primarily of business and payroll tax breaks, rather than major new stimulus spending. Apparently, the White House has made the calculation that it cannot get stimulus spending through the Senate, where Republicans have been engaging in historically unprecedented obstructionism. Therefore, our President is proposing more politically “safe” tax cuts. With the economic recovery faltering, and the Democrats in need of firing their base up, however, now is the time for bold action, not just “safe,” mild proposals. Write the White House and send a letter to the editor to urge President Obama and the Democrats to propose a major new stimulus spending bill to get our economy fully back on track.
A new stimulus package targeted at providing aid to state governments and investing in infrastructure projects would be both good policy and good politics for three reasons:
1. Stimulus spending works at creating and saving jobs: As the following chart from Steve Benen at the Washington Monthly shows, job losses were skyrocketing under the Bush Administration, to a high of almost 800,000 jobs lost in January 2009. Once the stimulus bill was passed in February 2009 and spending started kicking in, job losses fell rapidly, and in March, April, and May 2010 there was significant positive job growth. Unfortunately, now that the stimulus spending is starting to shrink, we have returned to slightly negative job growth. It is widely believed that while President Obama’s 2009 stimulus package was big enough to keep the Bush Recession from turning into the Bush Depression, it was too small to fully restore our economic vitality. Now is the time to make up for that by pushing for another stimulus package.
2. Stimulus spending benefits the country: As discussed in this interesting Time Magazine article, in addition to creating jobs, the stimulus bill also enabled our country to invest in critical infrastructure needs. For example, it included $20 billion to help move our nation’s medical system into the digital age through developing electronic medical records systems. Such systems could lead to $80 billion per year in savings from declines in prescription errors, reductions in administrative tasks for nurses, and better coordination of care. Similarly, the stimulus bill has provided $4 billion for long overdue efforts to improve our electricity transmission grid and to increase energy efficiency, which will save substantial amounts of money in reduced energy costs for years to come. Hundreds of billions of dollars more could be spent rebuilding schools, maintaining roads, supporting public transit operating costs, promoting high speed rail, and other important infrastructure projects.
3. The Public Favors More Stimulus Spending: Last week, Newsweek released a poll showing that 57% of Americans view federal spending to create jobs as a higher priority than reducing the federal budget deficit, which got only 37% support. In addition, 38% of Americans blame former President Bush for our ongoing economic troubles, while only 19% blame President Obama.
With Labor Day on Monday, the American public is just beginning to tune into the November elections. As such, now is the time for President Obama and the Democrats in Congress to show that they are fighting to jump start the economy, save middle class jobs, and assist those who cannot find a job by aggressively pushing for an additional major stimulus package. Faced with a Republican party that spent hundreds of billions of dollars bailing out banks and now wants to give $103,000 per year in tax cuts to the likes of Paris Hilton, a fight over additional stimulus spending to help average Americans should be one that every Democrat relishes.
Tags: economy, jobs, President Obama, stimulus
September 5th, 2010 at 6:33 pm
A big part of the calculation has to do with this
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/13/AR2010081306058.html
That and there is still 250 billion dollars of stimulus money left to spend.
September 7th, 2010 at 12:11 am
The fact that so much of the stimulus money is yet unspent is another reason why the stimulus is such a joke. Enact a payroll tax holiday and immediately money will flow to businesses and flow to people.
January 29th, 2012 at 1:09 pm
[...] Last year’s stimulus package kept the Bush Recession from becoming the Bush Depression, and stemmed the tide of job losses. Today, Obama proposed $50 billion in infrastructure investment and is expected to [...]