I am neither an economist nor a financial expert, but I can say with total certainty that our workforce, the beating heart of America's economy, is dying.
Whatever the arguments against President Obama's stimulus plan, some qualified; others not, the government must act. The people demand it.
It can be agreed that robust debate and good faith negotiation are essential requirements for the passage of any legislation that can truly be deemed effective.
However, the arguments that are cited, either in support or opposition of a measure, must be relevant to the issue being addressed. Moreover, they must be dictated by the facts that bear themselves out over time; be it through the gathering of data, or mere observation.
These are the facts:
1. We are in a national state-of-emergency.
2. The size of America's economy is literally shrinking.
3. Only the federal government has the resources that are necessary to stem the tide of the economic tsunami that is threatening to engulf the country.
4. Government spending will incur greater deficits, and thus greater national debt; but the solution must be comparable to the size of the problem. Half-measures will not mitigate the damage that has already been wrought; much less reverse the effect.
5. If action is not taken soon, then our economy will collapse.
Please, don't take my word for it...
"The House stimulus plan will not reverse the current recession, but it will provide a vital boost to the flagging economy. Without stimulus, unemployment will rise well into the double digits by this time next year, and the economy will not return to full employment until 2014."
- Mark Zandi (Chief Economist and co-founder of Moody's Economy.com). "The Economic Impact of the American Recovery and Reinvestment Act." Moody's Economy. January 21, 2009.
"We’re already closer to outright deflation than at any point since the Great Depression. In particular, the private sector is experiencing widespread wage cuts for the first time since the 1930s, and there will be much more of that if the economy continues to weaken.
As the great American economist Irving Fisher pointed out almost 80 years ago, deflation, once started, tends to feed on itself. As dollar incomes fall in the face of a depressed economy, the burden of debt becomes harder to bear, while the expectation of further price declines discourages investment spending. These effects of deflation depress the economy further, which leads to more deflation, and so on."
As the great American economist Irving Fisher pointed out almost 80 years ago, deflation, once started, tends to feed on itself. As dollar incomes fall in the face of a depressed economy, the burden of debt becomes harder to bear, while the expectation of further price declines discourages investment spending. These effects of deflation depress the economy further, which leads to more deflation, and so on."
- Paul Krugman. "On the Edge." The New York Times. February 5, 2009.
"CBO anticipates that implementation of H.R. 1 would have a noticeable impact on economic growth and employment in the next few years."
- Congressional Budget Office Cost Estimate. "H.R. 1, American Recovery and Reinvestment Act of 2009." January 26, 2009.
"According to Gallup trends, the American public has been consistent in its reaction to the concept of a major economic stimulus package since the start of the new Congress in early January. A slight majority of Americans favor Congress passing such a plan...Moderate senators eager to contribute positively to the debate and to potentially influence the bill's provisions have made the case for a smaller version of Obama's package...However, at this point, the more talked-about $800 billion-plus plan receives slightly more public support than the smaller plan."
- Lydia Saad. "Public Support for Stimulus Package Unchanged at 52%." Gallup. February 5, 2009.
The oft-uttered refrain by the recovery plan's most vocal critics in Congress that economic stimulus must be "timely, targeted, and temporary" is mostly correct.
Nonetheless, the following should be noted:
"While there will be much more discussion about the size and mix of government spending increases and tax cuts to include, the House Democratic plan is a very good starting point. This is important, for while such debate is necessary it must be resolved quickly. Unless a stimulus plan is implemented beginning this spring, its effectiveness in lifting the economy will be significantly muted."
- Mark Zandi (Chief Economist and co-founder of Moody's Economy.com). "The Economic Impact of the American Recovery and Reinvestment Act." Moody's Economy. January 21, 2009.
Stimulus now.
