Nine Reasons the Economy is Not Getting Better
Jobs data paint a discouraging picture of more pain to come
In recent times, Americans found myriad ways to fuel spending, even as incomes stagnated: borrowing against the once rising price of their homes and tapping plentiful credit cards. No longer. The paycheck has returned as the primary source of spending, and pay is eroding even for those who have jobs. This process is nowhere near complete, and, until it is, the economy will barely grow, if at all, and may well oscillate between sluggish growth and modest decline for the next several years until the rebalancing of the excessive debt has been completed. Until then, the private economy will be deprived of adequate profits and cash flow, and businesses will not start to hire. Nor will they race to make capital expenditures when they have vast idle capacity.
In other words, there are many more reasons today to expect the downturn to continue than to expect a turnaround. Consumer spending and residential investment could be even weaker than most estimates, and, as the level of fiscal stimulus begins its decline in the second half of 2010, we may be facing an even more difficult future.
No wonder poll after poll shows a steady erosion of confidence in the stimulus measures. One survey even showed 45 percent believe the limited results suggest they should simply be abandoned midway. The disappointment is understandable—but that would only make things worse. So what kind of second-act stimulus program should we look for? This time, it should not be an excuse to pass a lot of programs like those in the first stimulus package that do not really have the kind of multiplier effect on job creation and on economic growth that was intended. In any event, given the trends, it is absolutely critical that the Obama administration not play politics with the issue but really begin to prepare a second stimulus program, so that if the economy does take a major downturn, it will be possible this time to provide much more rapid government support to infrastructure spending that will maximize the creation of jobs. The time to get ready is now.
- Check out our political cartoons.
- Become a political insider: Subscribe to U.S. News Weekly, our new digital magazine.
Reader Comments
And..
They can stop taxing us to death.
what i think
I think it’s all the foreigners that keep coming in to be country I mean come on can we just get up and go to some of the other contras? the answer to that is heck no we can go to Mexico and may get a good job but we can’t just buy a home like they can or rent one I mean we are only allowed 90 days at a time but they get to come to the use and work I think they need to pass a law that you need to be a us citizen to buy a home in America. And that will lead to the end of job loss!!!!!!!
stimulus plan
What we should demand is instead of bailing out all these big companies that are in trouble like Fanny Mae and Freddy Mac 87 BILLION.... They should have devided that money up between every man women and child above the age of 18 who are genuine American citizens and after taxes would have given a 3 family household whose ages were 18 aand above almost 1 MILLION dollars now thats a stimulus plan and wouldjump start the economy quick WE AS AMERICAN
citizens have worked and paid for it and deserve it as we have earned it already but our government will waste our money throwing it after bad and excessive spending and people who are in dire straights can't get the help they need but illegal aleins can get what they need. We need to MAKE our government work for us not us for them. FIRE everyone in congress and start over put people in place that love this country and what its supposed to be about.
Both parties blame each other for the mess were in but the facts are the 542 people who make up our congress are responsible and should be held accountable ..
advertisement
