Archive for July 10th, 2009

Stimulus, Part II

Friday, July 10th, 2009

Warren Buffett yesterday joined the chorus in favor of a second economic stimulus package to stem the rising unemployment rate and boost consumer confidence. Smeal’s Terrence Guay, however, argues that the timing isn’t quite right for another round of stimulus:

It’s hard to justify a second federal stimulus package at this point in time for economic or political reasons.  Much of the $787 billion package from earlier this year has not yet worked its way through the economy, so there’s very good reason to give it more time to have its effect.  Even with the unemployment rate just short of double digits, other parts of the economy such as housing and consumer spending appear to be stabilizing.  And growing public concerns over the size of the federal budget deficit, projected to be near $2 trillion for the fiscal year ending in September, would make a second stimulus package politically explosive.  Perhaps most importantly, the Obama administration has more important priorities now, including health care reform and a more serious U.S. commitment to climate change.  Wasting political capital on an unpopular second economic stimulus package just doesn’t make sense this summer, if President Obama is to have any chance of success on these other two issues.

Tags: Economic Crisis, Economy, Guay, Politics, Unemployment
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