Reid- “there is no showing to me that another stimulus is needed.”

[masuki bance]

Democrats Split on Stimulus as Job Losses Mount, Deficit Soars

Democrats who control the levers of power in Washington are divided over whether to push for more deficit spending to end the recession and stem job losses, complicating the possibility of a second stimulus bill.

“We need to be open to whether or not we need further action,” House Majority Leader Steny Hoyer, a Maryland Democrat, told reporters yesterday. Senate Majority Leader Harry Reid of Nevada countered that “there is no showing to me that another stimulus is needed.”

President Barack Obama underscored the dilemma by addressing both sides of the argument. In an interview with ABC News yesterday, he said unemployment approaching 10 percent is something “we wrestle with constantly.” He added that spending more borrowed money is “potentially counterproductive.”

The split reflects two major challenges facing the Democrats: Record budget deficits that make additional spending much tougher to pass and a 26-year-high unemployment rate of 9.5 percent that is expected to rise to double digits.

...

The U.S. economy lost 467,000 jobs in June, exceeding economists’ forecasts, while the federal budget deficit is projected by the Congressional Budget Office to top $1.8 trillion this year and $1.4 trillion in fiscal 2010. That’s provoked criticism of the $787 billion stimulus bill passed in February as either wasteful or not large enough.

Borrowing Surge

...

With the White House and congressional Democrats focused on a major health-care overhaul and a climate bill, some lawmakers expressed pessimism about the likelihood of such legislation.

Deferring to Obama

“I’m not sure how you would do it,” said the Senate’s second-ranking Democrat, Dick Durbin of Illinois. He said he would leave any decision on the need for a fiscal stimulus to “the president’s evaluation.”

Republicans seized on the unemployment rate and job losses of about 6.5 million since the recession began in December 2007 as validation of their vote against the measure in February.

Senate Republican leader Mitch McConnell of Kentucky said in a floor speech yesterday that Democratic proponents of the stimulus program “over-promised on results and now their predictions are coming back to them.”

McConnell mocked the idea of another stimulus. He called it “mind-boggling” and a worse idea than the previous one, which he said “has been demonstrably proven to have failed.” He added, “There is no education in the second kick of a mule.”

Bernstein Defense

The White House dismissed calls to augment or alter the initial legislation.

“It’s working, it’s demonstrably working,” said Jared Bernstein, chief economic adviser to Vice President Joseph Biden, whose office is overseeing the rollout of the first stimulus.

...

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aIHpsBT0JHFc

Why would Reid lay down that marker now?

[Oregone]

1. Wow. Im terrified this is one thing Reid actually means.

[tridim]

2. Reid is schitzo.

Replace his ass now please.

[phantom power]

3. These fuckers are all going to fiddle while Rome burns. Just like 1929.

[Oregone]

5. or 1936 when they thought everything was better and cut back

[vaberella]

4. I don't get it. Harry Reid is right currently.

So far all of the money that was given hasn't been fully used or allocated by the states. Although reportedly around or about 20% has, that means 80% is left to kick in. Yes, the economy is still mulling along----barely and there currently may need to be something done in future. However, until the funds are used and we see the aftermath in about a year or so later--there is no way of stating that there will be funds needed now.

His statement is not that far off from what Obama has said in the past and many other Dems. Until the full allocation is met and we're seeing what happens in the short term to make some speculations in the long term----there is really no need to get more stimulus money as of yet.

It's logical. I don't even care for Reid, but he was on the ball on this---so I don't get the sudden target of Reid's statement. It makes sense.

[Oregone]

7. Here is a different take:

http://krugman.blogs.nytimes.com/2009/07/05/bruce-bartlett-misstates-the-problem/



"The predicted impact from the stimulus is indicated by the difference between these two curves. We’re now at the very beginning of 2009Q3; they predicted that the unemployment rate right now would be only a fraction of a percent lower now than it would otherwise be. The impact wasn’t supposed to be really noticeable until late this year, and wasn’t supposed to peak until late 2010.

The problem, in other words, is not that the stimulus is working more slowly than expected; it was never expected to do very much this soon. The problem, instead, is that the hole the stimulus needs to fill is much bigger than predicted. That — coupled with the fact that yes, stimulus takes time to work — is the reason for a second round, ASAP."

That is a clear point, and it goes along with Biden's "we guess wrong" comment. There is a bigger hole than "guessed", and since it takes time to work, waiting will exacerbate the problem. I don't even want to guess the inflation rate a year from now (plus the time it takes for another round to start working). It may be beyond disastrous and leave America with its own "lost decade".

[vaberella]

13. You're still not getting my point.

The stimulus hasn't been fully distributed is the first thing. After your post on Krugman's statement, there is no real indication from any economist how much stimulus would be needed to cover the gap. It could take several tries, that was a given from the beginning. In any event, I still don't see anything wrong with Reid's statement. Even though it's already known that it would take a while to work, not all of it has been distributed yet to know exactly what we're looking at. Until that is done, it's speculations.

As of a May article---one states only 6%, which means 94% hasn't been. In another one I read yesterday on this site it was 20% it's just coming out in trickles and until it's used we can't know how effective and if how much, if any more would be needed.

http://www.thedocisin.net/?p=5476

http://www.nytimes.com/2009/05/13/us/politics/13stimulus.html

As a New Yorker, I know that the stimulus package is being used in my State and the gov sites let me know the allocation but until 100% of the money is used or at least more than 50%---we can't sit there and say we need more money. I think Obama is testing the waters and realizes we're in a bind, but we need to see what works and how it works before we keep throwing ourselves more into this.

[Oregone]

17. And you still are not getting the "Big Picture"

First thing, lets take the premise that the stimulus funds haven't been distributed yet (which makes this argument stronger actually, not weaker).

Look CLOSELY at that graph. It predicts unemployment at 8% with stimulus at this point in time (really before the stimulus starts working, and a 9% PEAK without a stimulus). Get it yet?!?

Before the funds start working, we are at 9.5% and climbing probably. Does this make sense? The size of the stimulus was supposedly designed to be more effective in a lighter recession, not in the real one that is currently going on. This is the main indicator that the stimulus, as designed, was too light.

Now, lets look at your premise about the distribution of the stimulus funds....if they take that long to kick in, then a second stimulus passed tomorrow wouldn't help until past January of 2010. If you sit around and wait a year, as you suggested, then another 6 months for it even started working, then you wouldn't see a second bang until after January of 2011. By then, things will reciprocally get worse from an economy that was not jump started enough, and from everyone who slid off unemployment insurance.

You get it yet? So what if it hasn't "kicked in"? The economy is worse that what they thought it would be when it was supposed to kick in. Any long delay is going to take forever to have an impact. And this isn't just about like, well, if you need to put 2 trillion in today, then you have 3 years to do it....because if you wait three years, 2 trillion grows and becomes 4 trillion. The longer the economy collapses is the less private investment you will continue to see in a big spiral. Longer and longer will require more stimulus to make up for lost GDP.

[doc03]

10. Two weeks ago absolutely everyone

even CNBC's Larry Kudlow said the economy was recovering. Now today it's all gloom and doom over one bad unemployment report. Wasn't a spike in unemployment expected with the auto industry temporarily shutting down and what about the auto dealerships that were closed? The infrastructure improvements haven't even started yet as far as I have seen. Around this area the only thing done so far was to post a sign about the coming stimulus project, the local papers and right wingers are bitching about the cost of the signs. I did think from the get go that the stimulus plan was lacking on actual infrastructure spending most of it was just pork. Oh I do agree another stimulus plan is insane, the unemployment went over 10% back in the 1980's give the economy time to recover on its own. We are in debt up to our necks already.

[vaberella]

15. Yup. That's why I'm having trouble understanding the OPs intention.

And the various posts on this thread.

[masuki bance]

19. Intention? It's obvious there's a split. Just look here at DU. nt

[Jennicut]

21. Yes, it was really high for Reagan...and Reagan won reelection.

Also, would we have gotten much more stimulus from Congress to begin with? Its doubtful, it was the largest package ever and well...there are plenty of conservadems in the Senate.

[Life Long Dem]

12. Agree.

Things seemed to be getting twisted.

Like the President only had 1 choice. "Do you choose door number 1, or door number 2"?

[Autumn]

6. God I so wish Reid was unemployed

I just hope I live long enough to see it.

[LiberalEsto]

8. Dear Senator Reid:

I worked from the time I was 14 until last October, with a little time off for disability and for having 2 kids. For the record, I'm 57. I worked as a newspaper reporter mostly, but 5 of the 6 papers I worked for went out of business. The 6th is struggling. It's been 12 years since my last newspaper job, and I don't expect I'll ever work as a reporter again.

Since last fall, I've been unemployed, but because I worked part time, I don't qualify for unemployment benefits. Nor am I counted as one of the nation's hundreds of thousands of unemployed. My husband had to take a 12% pay cut recently, just to get a job in his field. Unfortunately most of the jobs in his field, computers, have gone overseas or to foreigners on H1-B visas. I don't know how we're going to manage the bills on our reduced income. I am unable to stand on my feet for very long, or I'd go down to the supermarket and try to get hired as a cashier.

I haven't seen any sign of the so-called stimulus. I see more and more people losing jobs. The Washington Post, our local paper, is full of page after page of trustee sales on foreclosed homes. As far as I can tell, things are getting worse for the average American, not better.

The banks have gotten their bailout money. When will the Democratic Party look after the people of the U.S., as opposed to the corporations? When are WE going to get a stimulus?

cc: Sens. Benjamin Cardin, Barbara Mikulski; Rep. Chris Van Hollen.

[lib2DaBone]

9. The Cowardly Lion.... "If I only had The Courage"

"We Don't need no stupid Stimulas... Nahhh"

[Thrill]

11. Only 10% of it has been spent. How can anyone judge it?

[vaberella]

14. Exactly....I have heard now between 6-20% has been used.

I don't get why the wanted outrage.

[DrToast]

16. Agree. It's too early for another stimulus package

[Oregone]

18. Is the unemployment just under 8% right now?

Because thats the economy they designed this stimulus for.

[bertman]

20. Of course not, Harry. You have a good-paying job, benefits, and lifetime medical coverage.

Why should you be worried about whether the stimulus is working.