Click here to check the ultimate guide to learn how to leverage your PC and internet to make money online.
The Washington Independent
The Washington Independent

Bubbles, Recessions and a Tough Year Ahead

We ran a piece today touching on the difficulty of fixing an economy broken by the bursting of something as large as the recent housing bubble. That is, if the

Thomas Dixon
News
Last updated: Jul 31, 2020 | Feb 04, 2009

We ran a piece today touching on the difficulty of fixing an economy broken by the bursting of something as large as the recent housing bubble. That is, if the inflated housing market allowed millions of Americans to leverage equity to buy things they couldn’t afford — and if millions of jobs were created to support that level of (unsustainable) spending — what force of nature or government could act to replace that economic engine?

Certainly not a $900 billion stimulus bill, which is just what some of the country’s top economists said in recent days. Indeed, experts are nearly universal in their predictions that the economy in 2009 will continue to tank — stimulus bill or none. Instead, they’re promoting an enormous spending package as a way to prevent the trough from bottoming deeper than it’s headed.

A sampling:

Alice M. Rivlin, former head of the Congressional Budget Office: “The stimulus package is certainly not nearly big enough to get back to the bubble economy. With any luck, it will mitigate the job loss and make the recession less bad than it would otherwise be.”

Heidi Shierholz, economist at the Economic Policy Institute: “No one ever thought this would bring us back to the strong labor market of the late ’90s…There’s this incredible hope that [the stimulus] is going to solve things right away, and it’s just not.”

Chad Stone, chief economist at the Center on Budget and Policy Priorities: “The goal is to get the economy back to a higher level of employment, [but] everyone expects unemployment to rise in 2009.”

Practically, then, the stimulus bill is intended to act as a sort-of crutch, allowing the injured economy to heal itself more quickly. Politically, though, you can already guess the messaging of GOP strategists as the 2010 mid-term elections get closer: After all, it was the Republicans who controlled Congress and the White House in 2006, when home values were at their peak and unemployment was 4.4 percent (versus 7.2 percent now). And it’s Republicans who have proved more than willing to let the Democrats take responsibility for the stimulus package (The House vote, remember, attracted precisely zero Republicans).

Will voters remember that the bubble economy of 2006 was an unsustainable phenomenon?

As Stone of CBPP said: “If, in 2010, there are no signs of improvement, then there will be trouble.”

Thomas Dixon | He creates the ideal marketing experience by connecting online brands with their target audiences. He recently completed a research paper on consumer conversion and took part in a community project on SEO optimization. Thomas is working on his Bachelor of Arts in Communications and plans to intern in an online marketing department soon.

Related

$1.89 billion given to states to fight HIV

The federal government Monday announced more than $1.89 billion in funding to states to fight the HIV epidemic with access to care and with more cash for the failing AIDS Drug Assistance Program. According to an HHS press release , $813 million of that money will go directly to the ADAP programming. An additional $8,386,340 will be issued as a supplement to 36 states and territories currently facing a litany of unmet needs and access issues.

Army Data Shows Constraints on Troop Increase Potential

If President Obama orders an additional 30,000 to 40,000 troops to Afghanistan, he will be deploying practically every available U.S. Army brigade to war, leaving few units in reserve in case of an unforeseen emergency and further stressing a force that has seen repeated combat deployments since 2002.

1. Brian Schweitzer

As governor of Montana, Schweitzer doesn’t represent one of the most highly populated, high-profile electoral states in the country. But this

$1.3 Million for Brown

The GOP’s candidate in the Massachusetts special election raised more than one million dollars -- double the goal -- in a 24-hour moneybomb on the Ron Paul

$1.3 trillion in federal spending unaccounted for, report finds

Despite calls for independent bodies to keep government accountable, the Sunlight Foundation’s most recent Clearspending report has found the federal

#1 in Conspiracy Theories

Andrew Young’s tell-all biography of John Edwards, hitting shelves next week, is surging in one Amazon.com category in particular. #1 in Conspiracy

1 Brigade and 1 Battalion

ISTANBUL – It’s 10 p.m. in the lowest level of the Istanbul airport. In 20 minutes I’ll be allowed to board my plane to Kabul, bringing me to the

$1 Million for Toomey

Pat Toomey, the former Club for Growth president and leading Republican candidate in Pennsylvania’s 2010 Senate race, has announced a $1 million haul in the

1. Lindsey Graham

Sen. Graham (R-S.C.) is typically regarded as a reliable vote for his party, but he took the bold step of breaking with his fellow Republicans to join Kerry

Bachmann uncomfortable over earmarks ban

Republicans appear to have boxed themselves into a corner with their portrayal of earmarks as wasteful spending, as many of them have backed a moratorium on

Troubled mine holds hope for U.S. rare earth industry

China currently controls 97 percent of the world’s rare earth production. The Mountain Pass Mine could change that -- if it can overcome serious environmental concerns.

© Copyright 2021 The Washington Independent All Rights Reserved

Terms & Privacy | twi.news@washingtonindependent.com

Click here to check the ultimate guide to learn how to leverage your PC and internet to make money online.