Obama rejects 2nd stimulus: Give recovery time

[DCBob]

Source: MATT APUZZO, Associated Press Writer Matt Apuzzo, Associated Press Writer

WASHINGTON – President Barack Obama on Saturday dismissed the idea the nation might need a second stimulus to jolt the economy out of recession and urged Americans to be patient with his economic recovery plan.

Faced with rising unemployment numbers and criticism from Republicans who have already labeled the $787 billion stimulus a failure, Obama used his weekly radio and Internet address to remind voters that reversing job losses takes time.

He criticized Republicans for opposing the stimulus but offering few alternatives to the worst recession since the Great Depression. And he rejected talk of a second stimulus, an idea that has been discussed by Democrats and even famed investor Warren Buffett.

"We must let it work the way it's supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity," Obama, who is visiting Ghana on Saturday, said in his recorded message.


Read more: http://news.yahoo.com/s/ap/20090711/ap_on_go_pr_wh/us_obama_stimulus

---

It is remarkable so many on right and the left have been making comments like: Why hasn't the stimulous plan worked? Where are the jobs? The plan has failed! When in fact a very small percent of the money has been spent -- something around 10-15%. It may not work but clearly we can't make a fair judgment of its effectiveness yet.

[boomerbust]

1. Hannity is predicting

A huge Puke victory in 10 because Obama plan is a complete failure. Hard to believe how dumbed down this country has become.

[pampango]

5. Just because Hannity is predicting it doesn't make it so. We'll see if the country is "dumbed down"

or just Hannity.

[DCBob]

6. I am afraid the idiot Hannity may actually be right for once in his life. Voters will blame Dems..

if the economy continues to tank. As you say the country is seriously "dumbed" down and it will be hard to convince voters to give Democrats another term if they are unemployed and near homeless. The hope is that the economic efforts do result in some improvement, any improvement by 2010.

[scentopine]

15. You are correct -

Rahm Emanuel is betting good will for Obama, and little else, will carry dems thru 2010 mid-terms. I'm not so sure. It's an arrogant position. Obama didn't get elected for his soaring rhetoric alone. His performance on grass roots issues like amnesty torture, amnesty for wall street, amnesty for health care monopolies, amnesty for wire tapping, etc have sucked the wind out of the sails of change. His coddling of the CIA and slave state republicans will backfire as important legislation necessary to lift the economy (i.e. money NOT blindly handed over to wall street) is made ineffective by republicans and democrats too afraid of losing corporate sponsorship.

As soon as republicans realize all they have to do is run a centrist (code word for semi-sane, right wing, corporate friendly) candidate, all those neo-dems who voted for Obama are going to bolt back to the republican party and there will be a gaping hole where there used to be funding and grass roots momentum for the democratic party.

Obama had a sweeping mandate for change, but on the average its been business as usual with little more than fluff talk. People rallied behind Obama because he stated in clear and unequivocal terms that he was going to change things, including corporate influence. Corporate America quickly showed him who's boss. It's been downhill ever since.

[DCBob]

16. It is not because the Dems will have failed it is because the situation may be unwinnable.

Bush and the Republicans left behind this tremendous mess and perhaps no one is capable of actually fixing it.

[scentopine]

25. Dems don't protest nor fight corporate influence

It is always winnable when you work together and protest en mass. Republicans had corporate sponsorship, but even that wasn't enough to win the presidency. This was because so many people at the grass roots level worked together and fought off the republicans. In return we were promised real change via bursts of soaring rhetoric. That fact has been forgotten and the ground zero workers were quickly cast aside as "liberals".

Corporate lobbyists hate public programs because they can't compete in the free market and so they depend on a big share of public money. So they'll do anything in their power to obstruct cash to public causes. Obama's focus on making centrists (i.e. republicans) happy is going to backfire. It is obstructing recovery and focus. This will keep the economy in ruins and drive unemployment and outsourcing up. This is going to piss people off including grass roots donors and workers. Dems are so much like a hungry snake eating its own tail.

All the republicans have to do is keep a foot in the door and their talking heads on the networks. Its starts by winning populist sentiment which the republicans know how to do. Dems will lose everything we fought for, not because Americans don't believe a liberal democratic focus is better for America, it will be because Democrats are to weak and too dependent on corporations to get any agenda passed that isn't designed by corporate lobbyists.

Watch as all the concessions made to the republicans cause prolonged economic and health care suffering, and then the republican's will use this against Obama. If this is a chess match, dems have painted themselves into a corner.

[DCBob]

26. You seem "impressed" by the Republicans ability to win over the public.

I suggest you try criticizing the Repubs a bit more -- they deserve it.

[scentopine]

28. More impressed by their influence over the Whitehouse

"I suggest you try criticizing the Repubs a bit more -- they deserve it."

LOL...you have no idea. However, I would encourage you to express this exact sentiment directly to our president as I have. I think a discussion over republican influence over the democratic party and their indisputable influence over american politics in general is an important one. Like it or not they control political tone and direction. We could learn from this. I believe we are making major policy mistakes that are politically expedient but dilute the value of our party and indirectly leave ourselves open to attack because we are so willing to roll-over stated moral and ethical principals.

[DCBob]

38. Seems you are intent on tearing down Obama and Democrats.

Why is that?

[scentopine]

41. Wrong. I am very critical of the democrats for whom I have supported for 30+ yrs.

And you are intent on making it personal. I'm not interested in that. Is it so hard to believe someone would dare be critical of Obama and the democrats on a democratic message board. Why not stick to the issues at hand instead of presuming who or what I am?

[DCBob]

42. Well severalhours ago the issue was Republicans using the failed economy to win in 2010.

I said they might be able to do that, even though it was unfair, but you went off on attacking Democrats and praising Repubs for connecting with voters.

[Zhade]

47. What a bullshit misinterpretation of the other poster's remarks.

You should be fucking ashamed of yourself.

[DCBob]

49. In what way? My, what an angry ugly response.

What's your problem?

[scentopine]

51. I am far more gracious than that - thank you for your original post.

I'm simply unwilling to fall back on the logic that Bush screwed the economy up so bad that dems can't fix it. I believe - "yes we can".

But, not by treating republicans and corporate sponsors like American royalty. Instead dems need to give the grass roots contributors and workers the policy influence they earned for hustling and pulling out votes. People may be uncomfortable expressing that sentiment in a public forum given the threat of being called an Obama basher, but privately, I assure you, many of us are very concerned.

We could learn a trick or two about marketing from the republican's use of populist themes. We've let them turn the word liberal into something equal to terrorist or communist. We let that happen. We are responsible. We need to admit things are really screwed up in the dem party and we need to start fixing it with some powerful messages about the good things democrats and liberals have done for this country over the last 100 years or so (although, we might not want to dwell on the last cowardly 8 or 9 years. I was hoping we were done with that, now I'm not so sure). Listen to FDRs speeches. Listen to MLK. They had a ferocious and brilliant courageousness against their adversaries that won people over, brought people out into the streets and they created real change for the better. We need that now.

[Iowa]

39. Well said scentopine. You nailed it. n/t

[Kittycat]

8. Do you know people that actually listen to that trashbag?

Seriously. Hannity is for extreme rush-types. Sane people don't listen to him, and take him seriously. Turn off Faux news.

[No Elephants]

10. Obama has said that he will be a one-term President if the economy is not fixed.

Obama's statemen addressed only the next Presidential election and Hannity's statement addressed only the next Congressional election, but both statements are based upon the same principle.

Besides, what do expect Hannity to say "I see Democrats in Congress holding all 60 seats in 2010, whether or not the economy improves?

[alcibiades_mystery]

22. Hannity predicted GOP wins in the last two cycles too

:shrug:

FAIL.

[shaniqua6392]

2. Eight years of mismanagement is going to take longer than six months to fix.

Republicans are just too stupid to figure that out. But they are kind of winning the war against Obama right now. His poll numbers are dropping because, once again, the media is helping out the right wing propaganda machine.

[DCBob]

7. No doubt. In fact it may take decades to fix this mess.

It is a very deep problem.

[No Elephants]

13. IMO, the problems started during the Reagan Administration and have worsened ever since. Mismanage-

ment is not the only issue. The laws and regulations put in place to prevent things from getting "too big to fail" and to provide other checks and balances were all dismantled. Reagan also loved that economic and moral abomination, "trickle down economics.

Regulatory agenceies became full of corporatists, rather than "John and Jane Q. Public-oriented watchdogs (and most still are). Glass Steagall was repealed. Many other laws were passed and signed by both Republicans and Democrats, facilitating corporate plunder and leaving average folks in the dust. Jobs were offshored. Alan Greenspan headed the Fed for 20 years. And so on.

If we make this all about Dummya and "his" war and spending, we misdiagnose. And if we misdiagnose, we'll mistreat. And, if we mistreat, we're doomed.

[fasttense]

3. The economy has already felt the bulk of the Stimulus impact.

"The reason is simply, more than 60 percent of the stimulus takes the form of lower tax rates and higher benefit levels for programs like unemployment insurance. The lower tax rates and higher benefit levels already went effect at the start of the spring. This means that people already have higher take-home pay or government benefit checks. The stimulus will not increase further in future months, which means that there is no reason to expect spending to increase further.

More than a quarter of the remaining stimulus is devoted to state and local government stabilization funds. This spending will limit the cutbacks at the state and local level, but will not lead to additional growth. The remaining funds are projected to be spent out at an $80 billion annual rate over the course of 2010.

Even if we assume that we are starting from zero spending at the moment, this is boost of just over 0.5 percent of GDP. By contrast, the collapse of housing construction trimmed $450 billion or 3.0 percentage points of GDP from annual demand. The decline in consumption due to the loss of bubble wealth is in the range of $600 billion to $800 billion a year."

In other words, what remains of the stimulus is too small to give much of a boost to the economy.

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=07&year=2009&base_name=the_timing_of_the_stimulus_imp&11

[DCBob]

4. You appear to be expecting a complete recovery from the stimulus -- it ain't going to happen.

The best we can hope for is a slowing of the decline and some semblance of stability. This will then allow business and job growth to take hold and build back slowly what we have lost but we likely will never return to where we were before. See Reich's sobering assesment.

http://tpmcafe.talkingpointsmemo.com/talk/blogs/robert_reich/2009/07/when-will-the-recovery-begin-n.php?ref=fpblg

[NeoConsSuck]

9. Agreed

the last two economic recoveries were built on bubbles. The tech bubble, followed by the housing bubble. America is a 'mature' market, there isn't much growth left, like you will see in emerging markets. So if we want to see real growth, we create bubbles.

The problem is, sooner or later, bubbles pop.

[DCBob]

17. Yep. We need another "bubble".

Some think there could be a "green" tech bubble.

[hedgehog]

18. I don't think of green tech as a bubble so much as the paradigm

shift we need to survive. We can't go on as we have, the planet won't sustain us. It is my impression that the stimulus bill was meant only to protect the innocent bystanders after the collapse of the financial markets long enough to allow real economic reforms to take hold. I include green technologies and health care reform among the changes that need to be put in place.

[DCBob]

19. I agree. My post was kind of tongue-in-cheek.

Clearly our hyper-consumerism lifestyle is unsustainable.

[Psephos]

31. We are already in the midst of a rapidly expanding bubble

The debt bubble.

It will burst when Uncle Sam can no longer find buyers for the trillions of deficit spending planned for coming months and years, because they start to realize that debt is never going to be paid back.

And then we will all long for the good old days of 2009.

http://www.washingtonpost.com/wp-dyn/content/graphic/2009/03/21/GR2009032100104.html

[amandabeech]

52. Interest rates on new auctions will skyrocket, and effective rates on existing debt will do the same

The dollar will be debased to the extent that the Chinese will be forced to value their currency against, at the very least, a basket of currencies of which the dollar will be a very minor component.

There will be massive economic problems here at home, but I doubt that we will default technically.

I agree that we are in one helluva mess.

[JerseygirlCT]

34. I agree

there's definitely a strong psychological component to this downturn. If people can feel the ground a bit more solid beneath them, there's likely to be a bit of healing, I think.

[Abq_Sarah]

53. Business will not increase until consumers have money to spend

There's no getting around that.

A $400 reduction in payroll taxes over 8 months isn't going to save any American business. We are spending money we don't have on projects that are not going to stem the job losses we're experiencing.

[Zynx]

11. However, the lower witholding has increased personal savings greatly to over 5%.

This will at a minimum serve as a stabilizing factor in future consumption or may be drawn down to give a boost to future consumption. This will have a continued positive effect.

[No Elephants]

12. I agree with the article to a great extent, but I also disagree that consumer spending will not

increase at all. People got very scared about the economy--and rightfully so--just before the election and still are. As they get less scared, they will spend.

The article disimisses tax cuts and unemployment benefits as though they do not and will not relate at all to consumer spending. They will. And as people feel more confident and/or can no longer put off certain purchases and expenditures, they will spend. The article also dismisses consumer spending that comes from stabilitizing state and local governments. That accounts for a huge number of jobs, though. And, again, as confidence rises and/or things cannot be put off, consumer spending will result from saving state and local government jobs.

Besides, I am not sure sure that none of the money yet to be disbursed is going to new projects. That is certainly not the imporssion that I get from other sources.

But we are not going back to what the economy SEEMED to be like in 2007. Maybe never. And people may have to adjust their expectaions.

Still, I wish we had gone the FDR route, instead of the Bush-Paulson-Bernanke-Obama-Geithner route.

[Mari333]

14. people with no jobs dont spend

as long as jobs continue to be bled out of the country to India, China, Mexico etc, for slave labour wages and short term profit by asshole corporations, and the only thing left are minimum wage crap jobs, there wont be a recovery.
add to that billions and billions spent on 2 insane occupations of 2 countries and a defense budget thats too damned big,
well
there wont be a recovery ever at this rate.
Im hunkering down and getting into 3rd world mode.

[DallasNE]

24. We're Already Seeing Results

Perhaps not the way some people expected. Plus, results occur in a ripple fashion. One the first ripples is showing the the decline in the trade deficit. The trade deficit in May was the lowest since November 1999 -- that's nearly 10 years. Perhaps I should say this is the second ripple and say the first ripple was the increased savings rate by Americans. Yes, people are not buying American cars but they are not buying Japanese cars either as the value of Japanese exports dropped by a whopping 40% and those job losses are happening in Japan, not America. When Americans start to buy again the trick will be to get them to buy American, otherwise it will mean jobs overseas rather than right here at home. Americans are driving less and that is reflected 100% in a decrease in imported oil. More fuel efficient cars means that deficit will have long range improvements.

What we are starting to see is the deficits from the stimulus being paid for by the reduction in the deficit on imports. Soon we will start to see a decrease in savings and that will start the trickle up effect into the overall economy. Given the fact that we lost trillions of dollars in the capital markets it is amazing that the economy hasn't suffered even worse. It is also amazing that the healing of those financial wounds is happening as rapidly as it has. Frankly, I don't think we could have hoped to have any better results than we are seeing today. I say, rejoice.

[Mari333]

29. I dont think people will be buying again

and when they do buy essentials, they will buy what is cheapest. they wont care where its from.

[Igel]

55. However, those "ripples" aren't because of the stimulus.

The savings increase is because people feel poorer; they've lost assets, and what assets they have have lost value. Sure, let's blame Obama for that.

The lion's share of the decline in the trade deficit was oil. We're driving less because 5% more of the population is unemployed--hey, no commute! We're producing less because the factories aren't working at capacity, and offices have reduced staffing and hours. As for the rest, people can afford less. Let's blame Obama for the unemployment rate increase, too.

A government deficit is different from a trade deficit. Oddly, by importing less we pay fewer duties, which would go into the federal coffers.

[Deja Q]

36. The system eats itself; the same people with huge salaries wanting to pay slave labor...

will soon have to make up for their greed big-time.

Not going to happen.

So much for "the Relationship Era".

http://rogersobservations.blogspot.com/2008/02/what-is-relationship-era.html

[Mari333]

40. yep. I saw this and knew it back in the 80s

when jobs started running overseas at an alarming pace thanks to Reagan and his corporate tax cuts ..he claimed the corporations would use the money to rebuild america...FAIL..they used the money to leave the country and take the jobs with them to hire people for 8 cents a day..short term profit for a bunch of greedy corporate whores..
well, when you aint got a decent paying job here, you dont buy a damned thing. It will be satisfying to see big corporations crumble under the weight of their own greed..who they going to sell their cheap ass shit to now?
fill a glass with champagne, put on a nice suit, and jump, you fuckers.

[Deja Q]

44. Only karmic; I'd rather not have seen our country, them or us, go down like this.

And it'll affect the global economy too, as has already been seen. (e.g. countries that have mass produced, doing shoddy work that quickly break or, worse, cause sickness or death... they now have reputations too, so what's going on is hardly the fault of just a handful of greedy in the USoA...)

I still think of a whirlpool commercial from 1978...

http://www.youtube.com/watch?v=Zj-vIOMtVY0

These days, people engaging in that behavior are called "perfectionists" by counselors and psychiatrists... (not second rate, but wanting to do things right the first time.)

[Psephos]

33. Good post...

...and your last sentence is dead on.

If you're interested in a thumbnail sketch of what's been spent so far, and how, here's a decent article in the Washington Post.

http://www.washingtonpost.com/wp-dyn/content/story/2009/07/08/ST2009070802011.html

[Odin2005]

20. Proof that our society has gone of the deep end with our consumerist "on-demand" BS.

People need to learn what PATIENCE is again.

[hardtoport]

37. delete

[steven johnson]

21. FACT CHECK: GOP joins murky math on stimulus jobs

While I am suspicious of 'blue sky and sunshine' promises, Republican spinning if the facts make me doubly suspicious of GOP 'facts.'

Obama's not perfect -- but he's not at the Bush-Cheney level of lies, deception and fraud.

WASHINGTON (AP) — House Republicans on Friday declared the nation's economic stimulus efforts a "dismal failure." But the convoluted math they used to disparage the recovery is as murky and meaningless as the White House formula championing the stimulus.

...committee members argued simultaneously that the government was spending too much money and not spending it fast enough....In fact, stimulus projects have to be ready to begin quickly. Projects that have yet to clear permitting, environmental review or other bureaucratic hurdles won't get funded because they won't meet the law's deadlines.
...Environmental restrictions prohibit developers from building highways in areas that would pollute drinking water or send water flooding into nearby basements.


REP. MARIO DIAZ-BALART, R-FLA., SAID: "There is a new definition for dismal failure: Stimulus. This stimulus."

THE FACTS: The argument is based on the idea that unemployment keeps going up despite the transportation spending. That's a non-sequitur. The $48 billion in transportation money represents just 6 percent of the total stimulus. A far greater share of stimulus money, $288 billion, was spent on tax cuts, and conservatives would never accept the argument that rising unemployment proves that tax cuts don't work.

FACT CHECK: GOP joins murky math on stimulus jobs

[mvd]

23. There should have been more in the original stimulus

But now we should just let the stimulus be paid out and have an effect. We can always add more later.

[lib2DaBone]

27. I'd be glad to be patient until the "recovery" kicks in....

..except the bank wants their payment right away. Blue Cross wants their payment yesterday and State Farm wants their payment today.

The County wants their property taxes right away and the IRS wants their cash right away.

Politicians talk out of both sides of their rotten mouths.

[ohio2007]

30. Stimulus plan is either seen as a well oiled machine or a runaway train wreck. Congress prefers

a well oiled train wreck approach :wow:

[Deja Q]

35. California set a precedent, and not by electing incompetent "known" faces either.

Hand out IOUs.

:popcorn:

[Missy Vixen]

50. Thank you

The President seems to be forgetting that there are millions now who just can't wait. We don't have the luxury of believing things will get better.

There are no jobs, Mr. President. It's not possible for us to live on unemployment. I might also mention that the "homeowner stimulus" seems to not be worth the paper it's written on -- after all, mortgage companies are simply digging in and outwaiting us.

In the meantime, I've said it here before, and I'll say it again: When the vast majority runs through the last federal UI extensions, THAT'S when it's going to get fun. I predict a march on Washington (with those who actually have even the cash to get there,) that will make the IWR march look like a tea party.

[depakid]

32. Sad that the administration seems averse to listening to economists who got it right

Kevin Rudd, he ain't.

[cloudythescribbler]

43. I think Obama & Admin are TOTALLY wrong -- 2d Stimulus Needed NOW!!!!

At the time that the first stimulus was put forward, many people recognized (a) that it needed to be bigger even than first proposed, before being watered down in a 'compromise' to win just a handful of "moderate" Republican votes and (b) that more such bills might be necessary as time goes on

After the initial bill was put forward, the 'compromise' mentioned above heavily slashed spending to state and local governments, which are now in even more dire straights than was then expected. This means that state and local governments are raising taxes and cutting spending and jobs, at this point possibly even MORE than the mere 15% of the stimulus spending that has actually been spent!
These losses to state governments, and the possible default of CA and other public venues, only would magnify the present crisis. Biden has already admitted that the recession is worse than was expected when the initial stimulus (even before 'compromise') was put forward -- why not use the fact that Al Franken is now seated, and that (supposedly) Specter has become a "Democrat" to push for at least some bailout for the state and local govts so they won't continue their current counterproductive policies? Also, bailouts for homeowners facing foreclosures and for public higher education (and students) also makes sense. These and other NEAR term stimuli are needed badly and needed NOW!

[Deja Q]

45. I think we need more middle class jobs at home, which in turn negates any need for tax increases...

and gets people to spend again.

Would that not be considered a 'stimulus'?

[Zhade]

46. The plan failed because he rewarded the very people who helped destroy the economy.

But "Thank God It Passed!", to echo the words of the willfully delusional!

[DCBob]

48. It is way, way too early too early to assign fail or success to the stimulus plan.

Appears you are part of the "instant gratification" crowd. Be patient. It will take several more months or perhaps a couple of years to have measurable impact.

[Psephos]

54. When a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.

Dr. Johnson said that.

These days, when the sheriff is coming to post an eviction notice in a fortnight, the need for a little instant grat sharpens one's impatience considerably.

Take what Churchill said: "However beautiful the strategy, you should occasionally look at the results."

Lately I've been looking at these results:


and these:
http://www.washingtonpost.com/wp-dyn/content/graphic/2009/03/21/GR2009032100104.html

and reading this with my eyeballs popping out of my head:
http://www.usnews.com/usnews/politics/bulletin/bulletin_090706.htm

and I have to admit, I'm turning more instant-grat by the day, no matter how beautiful the strategy.

[Igel]

56. Yeah, that's a killer of a graph.

It immediately strikes the eye and calls to mind the urgency of the stimulus--we have to pass it *now*, because the shovel-ready projects are waiting and if we wait any longer unemployment will soar, positively soar--even pass that 8% mark. Billions of dollars in shovel-ready projects were waiting to stop the unemployment rate from increasing. When sceptics said that it would take at least 6 months for a lot of projects to go through the bureaucratic hurdles, and a majority of the money not simply funnelled to existing entitlement/unemployment programs wouldn't be spent until f/y 2010, the sceptics were called wrong, ideologically biased, etc.

"Shovel-ready project" has come to mean "increased employees by a manufacturer of well-insulated windows, driven by increased demand because of a tax credit to be taken on your 2009 tax return." Yep, we have shovel-ready windows. It's come to mean extended unemployment benefits, and making sure that education funding is doled out to promote policies developed months after the stimulus bill passed. We have shovel-ready unemployment compensation.

Even Geithner tacitly stabbed Obama in the back: Almost all the "economic policies" responsible for the improvements he cited were based on TARP or his stress tests, even as some tried to say the stimulus was responsible. Oddly, of course, the second disbursement of TARP is both a feather in Obama's cap (and Geithner's), but part of the evil deficit-increasing machinations of the * administration. A well-honed sense of timing is crucial to spin, it would seem.

Of course, all of this is as planned, we're told. Unfortunately, all of this is not as billed, even as we're being told that what was printed and broadcast live is different from what is now said to have been printed and broadcast. I've always disliked beauty pageants and the kinds of contortions contestants have to go through to win.