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Tilting at Windmills

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January 27, 2009

CBO PESSIMISTIC, FINDS NEED FOR STIMULUS.... A bleak forecast.

The nation's current recession is likely to be the longest since World War II, and by some measures could be the worst since the Great Depression, a new Congressional Budget Office forecast said Tuesday.

Without a major economic stimulus plan, "the shortfall in the nation's output relative to its potential would be the largest -- in terms of both length and depth -- since the Depression of the 1930s," said new CBO Director Douglas Elmendorf in testimony prepared for the House Budget Committee.

The analysis is sure to add important momentum to the effort to enact an $825 billion stimulus by mid-February.

Well, one would certainly like to think so.

Elmendorf added that the stimulus proposal "would provide a substantial boost to economic activity over the next several years relative to what would occur without any legislation."

There's been quite a bit of interest lately in the CBO's analysis of the stimulus package and the economy. What do you suppose the chances are that Republican lawmakers will be as enthusiastic about today's CBO forecast as they were about a preliminary report based on a partial look at an out-of-date stimulus proposal?

Steve Benen 3:00 PM Permalink | Trackbacks | Comments (18)

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Hah! Republicuns have never been bothered by "facts." Why should they start now? Realpolitik requires constant propagandizing. "Facts" just get in the way.

Posted by: CT on January 27, 2009 at 3:08 PM | PERMALINK

We have been stimulating and bailingouting for a year now.

The greedy have milked a few trillion out of us while another few trillion in wealth has disappeared, only this wealth is spread throughout the globe.

The only stimulus that will work is one that fundamentally accepts the need for a new paradigm.

We can't stimulate a dying beast. The jolts of money have only kept it upright, not moving with life.

We clasp our hands to our cheeks and exclaim, "Oh no! Unregulated capitalism is an ugly thing."

The latest stimulus package needs to not just hold our economy upright but give it meaning, give it a reason to live.

A new paradigm.

That's change we need.

Fundamental shifts towards 100% green-mother earth power (and father sun).

Fundamental shifts towards educating all, everywhere.

Fundamental shifts towards rational, human thought, versus rancid fundamentaliststic mentalities.

Posted by: Tom Nicholson on January 27, 2009 at 3:11 PM | PERMALINK

The CBO is suffering from paralysis by analysis.

The time for theorizing is over. Congress must act now and enact broad-based tax cuts rather than handouts.

Posted by: Al on January 27, 2009 at 3:16 PM | PERMALINK

What do you suppose the chances are that Republican lawmakers will be as enthusiastic about today's CBO forecast as they were about a preliminary report based on a partial look at an out-of-date stimulus proposal?

The Repubs will do and say whatever the drug addicted boy-lover Limbaugh instructs them to say and do.

It's obvious that the CBO's "new report" is an example of partisan, fly-by-the-seat-of-your-pants while tapping out Journey's anthems of success in a Minnesota airport bathroom.

Cantor and Boehner are on the phone with El Gordo right now.

Posted by: Gang Green on January 27, 2009 at 3:18 PM | PERMALINK

What do you suppose the chances are that Republican lawmakers will be as enthusiastic about today's CBO forecast as they were about a preliminary report based on a partial look at an out-of-date stimulus proposal?

How dare you, sir, suggest that Boehner's Bombastic Blockheads of Belligerent Buffoonery should even consider reality and factuality as legitimate tools of political negotiation? Why, the next thing you'll be asking is that they breathe through their nostrils, walk erect, lift their knuckles from the ground, and accept the heretical concept that the earth is round!!!

Posted by: Steve W. on January 27, 2009 at 3:20 PM | PERMALINK

Tax cuts do nothing for a dying economy.

When you get locked into the tax cut band wagon you forget that those funds no longer are in the general pool of monies.

Tax cuts don't = jobs.

If any thing, they mean expensive corporate jets and refurbed offices.

The Bush Tax cuts of a few years back created the derivative-based sub-prime lending scams that led to a housing bubble that fed into an oil spike (remember 7/08?) that then conned us all into bail outs.

No, the wrong way to stimulate the economy is with tax cuts to the least deserving.

Posted by: Tom Nicholson on January 27, 2009 at 3:25 PM | PERMALINK

Republicans don't see it but Obama is setting them up to look ridiculous.

I just heard him say in a YouTube clip on TPM after his meeting with Congressional Republicans "in some cases they may just not be as familiar with what's in the package as I would like". That's another way of saying Republicans can't be bothered to do their jobs while you are losing yours. Obama is teaching America that things like reading the legislation are a prerequisite for having a strong opinion on the legislation. Especially if, you know, you are in Congress.

Obama is going to make a $5 reality chip the cost of anteing up in the game. Boehner and McConnell can't just parrot "tax cuts, birth control! tax cuts, birth control" when they A) have no CBO data to back them up, B) aren't familiar with the spending provisions in the bill outside their talking points.

Obama is going to nice as pie call them whiny brats whose only answer to substantive policy questions is "the dog ate my homework". And that will be accurate.

Posted by: joejoejoe on January 27, 2009 at 3:31 PM | PERMALINK

Tom, you are right: a new paradigm is required and the only way that this "problem" will be solved. I suggest everyone read Dr. Jean Houston's A Mythic Life, or anything else by her: The Possible Human, Jump Time. Visit her website, www.jeanhouston.com. This is a person who has more contacts throughout the world than most politicians or diplomats could ever hope for. She has spoken before and worked with the U.N., world leaders, including the Clintons, some of the most advanced intellectuals from across the world.

If you are truly interested in new ways of thinking and being, Jean Houston is a source. If you just want to jabber at each other in old school format, enjoy!

I am committed to Oneness through Justice and Transformation
peace,
st john

Posted by: st john on January 27, 2009 at 3:35 PM | PERMALINK

While I agree Obama is setting up the Rethugs to look like fools it may not be so obvious to the American people. With the MSM doing everything in their power to parrot RW talking points about this stimulus package, Obama et al will need to devise a shrewd media strategy to ensure that the basics of the stimulus and its benefits are clearly communicated to the public. The DNC, Dems in Congress and Obama need to seriously improve their ability to effectively communicate their ideas/legislation to a lazy corporate media. A coordinated media Democratic media strategy incorporating talking points and cable tv appearances is paramount to any success Obama and the Dems expect to gain over the next 4 years

Posted by: lib4 on January 27, 2009 at 3:43 PM | PERMALINK

Here are a couple of paragraphs from Paul Kurgman's editorial today entitle "Bad Faith Economics".

Next, write off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.

Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.

I believe that everything that works in the U.S. is a public-private collaboration, and the air traffic control system is an example: one of the public parts of the airline traffic system.

However, only 10% or less of the $825 Billion stimulus is actually infrastructure projects like the air traffic control system. Shouldn't there be a much stronger effort to make sure that the projects funded by the stimulus package actually contribute long-term value to the economy? Nancy Pelosi's (apparently short-lived) birth control item was a simple expansion of an on-going program, a program with negligible long-term stimulus value to the economy.

Is it "bad faith" to point out (or to deny) that the $825 Billion "stimulus" will reduce the amount of alternative investment by $825 Billion, in addition to adding $825 Billion plus interest that will have to be paid for out of future tax revenues? [that's for emphasis, the $825 Billion is not lost from the economy twice.]

Krugman also referred to people who are not knowledgeable about economic concepts. Is it "bad faith" to emphasize [or ignore outright] the fact that "economic stimulus" packages have never been shown to work? The concepts are ever so refined, but sooner or later the concepts need to be backed up by evidence from actual interventions. Right now, all the evidence is correlational, and everybody knows that correlation does not imply causation. Krugman has asserted that FDR's program did not work because FDR did not borrow and spend enough: obviously that can't be known.

Unless Krugman is to be accused of "bad faith", shouldn't he tell us how big the stimulus should be? Right now he is afraid that it "may not be enough", without telling how much is enough. And shouldn't he tell us which projects should be included and which projects should be excluded?

I think we'd be better off in the "long run" without the stimulus, and the time of the "long run" will arrive.

Posted by: MatthewRMarler on January 27, 2009 at 3:58 PM | PERMALINK

Point of order.

The great depression was the 1930s. and America's part in WW2 started in roughly 42.

So what is the big depression between the Great Depression and WW2?

I keep hearing this over and over, the worst depression since ww2 and perhaps the greatest depression the great depression.

odd

Posted by: jimmy on January 27, 2009 at 4:48 PM | PERMALINK

Pull up the popcorn after the House passes the new and improved Democratic only stimulus package as the Republican real time filabuster in the Senate should be a thing to behold - I want them to tell me why their obstruction of a needed recovery package is a good thing. I'll listen, but I don't expect much sense being made from the likes of McConnell and his senatorial brothers in Republican suits. -Kevo

Posted by: kevo on January 27, 2009 at 5:02 PM | PERMALINK

The stimulus package is also working as a distraction for just WTF happened to the bailout money we just gave to the banks. Billions handed our in CEO packages and expenditures??? There is time before Feb's decision to make these people accountable or return the money.

The taxpayers are charged with rewarding failure???

Posted by: joey on January 27, 2009 at 6:35 PM | PERMALINK

Hey guys, wake up.

Let me say this one more time so all you young Obama supporters can perhaps understand this very, very important point: Obama's stimulus does not represent "change". It represents the same, old, traditional response to other economic recessions we have gone through in the past. TRYING TO SPEND YOUR WAY OUT OF A DEPRESSION HAS NEVER, EVER WORKED TO SHORTEN AN ECONOMIC RECOVERY! IT HAS NEVER, EVER WORKED TO CREATE REAL, LASTING JOBS FOR THE POOR AND LOWER MIDDLE CLASSES ONCE THE MONEY RUNS OUT.

If you truly want to stop this economic recession and hasten the creation of new jobs in the shortest possible time, reduce taxes on both producers and consumers, while paying for the tax cuts through reducing government spending, NOT BY BORROWING AGAINST YOUR FUTURE.

FOR EVERY DOLLAR CUT IN GOVERNMENT SPENDING, FIVE WILL BE CREATED IN THE GDP IN FIVE YEARS. That is real economic growth. And as I have tried to explain in previous posts: Young,Obama supporters are going to be the principal class who will have to shoulder the enormous economic burden this stimulus package represents should it pass in its present form. By 2017, when social security surpluses runs out and becomes a net debt, it will be you who will have to increase your taxes to pay for not only the increased costs of social security, but tfor this stimulus package as well. This is serious stuff. You had better think long and hard about supporting this stimulus package. Your future will depend upon Congress getting it right.

ex animo
davidfarrar

Posted by: davidfarrar on January 27, 2009 at 8:55 PM | PERMALINK

Apollo Project evaluation of the stimulus proposal is here:

http://apolloalliance.org/news/data-points/data-points-comparing-stimulus-with-apollo-recovery-act/

Posted by: MatthewRMarler on January 27, 2009 at 9:20 PM | PERMALINK

When you get locked into the tax cut band wagon you forget that those funds no longer are in the general pool of monies.

A similar forgetting happens with borrowing: when you are spending the borrowed money you forget that it no longer exists for other investment.

Posted by: MatthewRMarler on January 27, 2009 at 9:23 PM | PERMALINK

As our greatest economist, Pat Buchanan, has pointed out, if stimulus helped, the economy would be burning hot after all the deficit spending we got from the King of Spenders, Bush, in his eight years of profligacy.

Posted by: Luther on January 28, 2009 at 12:37 AM | PERMALINK

Is it "bad faith" to point out (or to deny) that the $825 Billion "stimulus" will reduce the amount of alternative investment by $825 Billion

It is when you do it, Marler -- putting "stimulus" in scare quotes is a dead giveaway.

Posted by: Gregory on January 28, 2009 at 7:48 AM | PERMALINK




 

 

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