Sunday, June 06, 2010

The Need For A Second Stimulus Exists As Dow Dips Below 10,000

 If you do some digging on the net, the need for a second stimulus is documented even as early as last year in 2009.  We are only recently hearing more calls for a second stimulus; but the case for a second stimulus is mounting; especially when one considers that the last stimulus did not take into account any fiscal problems for state and local governments.  In addition to Paul Krugman's recent assertion, many have long argued the need for a second stimulus.  Most in fact the very day that the first stimulus was passed.  It was recognized that the first stimulus would not do enough to create private sector jobs. In January of this year, it was recognized by The Christian Science Monitor that the need for a second stimulus exists. 

The last stimulus package didn’t take into account the fiscal problems the recession would create for state and local governments.         -The Christian Science Monitor

On January 22, 2010, The Christian Science Monitor reported at this link: that the U.S. economy needs a second stimulus.  The article references Keynesian economics which is the key that China is using to get out of their recession citing the construction of high speed rail in China.  Something that this government is not truly doing.  Not in the way that the Republicans are saying that we are not doing .  The Republican model for economic policy is an all out spending freeze. 

The United States mastered macroeconomic management, wrote the textbooks, and the Chinese are currently using our own playbook to have a faster recovery in this Great Recession with an economics model created by the United States.  The article referenced by the Christian Science Monitor was written from the assertions of Joseph Stiglitz, who was awarded the Nobel prize for economics in 2001 and has published the book, Freefall: America, Free Markets and the Sinking of the World Economy the link to this book is posted below for anyone interested in the assertions made by Mr. Stiglitz, an economist who the federal government needs to be listening to and passing a second stimulus. 

Below is an excerpt from that article in the Christian Science Monitor: 

The US stimulus has made a difference. If we hadn’t had the stimulus, unemployment would be 11 or 12 percent. Yet, it was not big enough or well enough designed to bring employment back to normal levels.                     

This is a tool for the unemployed.  This is a talking point and this is a reason to petition again to Congress, this is another reason to continue advocacy.  Perhaps Congress does not have the political will for a "Tier 5" because of the name.  Let's just call it EB2 then.  Call it the "Funding States That Are Broke Act of 2010".  Call it whatever you want to call it.  Write the legislation and pass it NOW!

Readers, we need input! 

It is obvious persons are exhausted over everything.  Frustrated.  At the tipping point, if you will...   Scared.

Would it be worthwhile to start a campaign for a second stimulus or is everyone too burned out at this point?

You wouldn't be calling Congress for a Tier 5, you would be calling for a second stimulus to prevent the double dip recession which is inevitable without it.  Investors are not going to invest unless they are certain the economy is going to create jobs and increase consumer spending.  Naturally, cutting the safety net from 10% or more of the United States population is not a very smart way to increase consumer spending.  Doing nothing is not a solution.   Waiting until November to take action is not a solution.  Ideas anyone?

The unemployed might win their argument for a Tier 5 by making this a case about the economy rather than just unemployment insurance extensions.
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