|The U.S. economy is shedding jobs like dog hair ... unemployment has hit a 16-year high of 7.2 percent ... with 524,000 jobs lost in December alone (projections put it at 9 percent or more by next year):
The economy lost an astonishing 1.9 million jobs in the past four months alone, an acceleration in layoffs toward the end of a year that brought the biggest drop in employment in more than a half century.
For all of 2008, the economy shed 2.6 million jobs, the largest decline since a 2.75 million drop in 1945.
The December data pointed to a bleak start for 2009 and increased chances the economic downturn could become the longest since the 1930s.
Great Depression? Maybe so. BTW re Obama's stimulus plan: Krugman is not amused.
Meanwhile, more proof that Bush's $700 billion TARP swindle was just that: a massive giveaway to the country's largest banks, in exchange for nothing. Nothing for mortgage holders, nothing for taxpayers, though they did give bonuses to their CEOs and dividends to their richest investors. Hopefully, Obama will scrap the plan and use the remaining $350 billion to beef up his stimulus plan.
Why isn’t Mr. Obama trying to do more?
Is the plan being limited by fear of debt? There are dangers associated with large-scale government borrowing — and this week’s C.B.O. report projected a $1.2 trillion deficit for this year. But it would be even more dangerous to fall short in rescuing the economy. The president-elect spoke eloquently and accurately on Thursday about the consequences of failing to act — there’s a real risk that we’ll slide into a prolonged, Japanese-style deflationary trap — but the consequences of failing to act adequately aren’t much better.
Is the plan being limited by a lack of spending opportunities? There are only a limited number of “shovel-ready” public investment projects — that is, projects that can be started quickly enough to help the economy in the near term. But there are other forms of public spending, especially on health care, that could do good while aiding the economy in its hour of need. Or is the plan being limited by political caution? Press reports last month indicated that Obama aides were anxious to keep the final price tag on the plan below the politically sensitive trillion-dollar mark. There also have been suggestions that the plan’s inclusion of large business tax cuts, which add to its cost but will do little for the economy, is an attempt to win Republican votes in Congress.
Labels: economic crisis, President Barack Obama, the Bush recession, the economy