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Why we worry

Pete Davis:

What more can Washington do? We've already done about everything anyone can think of to stimulate the economy. It's had some beneficial effect, but it may not be enough. I am still haunted by Robert Schiller's statement to the National Economists Club on May 5, 2010, "The real worry is that we'll grow slowly until we run into the next recession."

I don't agree that we've done "everything anyone can think of," but I do agree that we've done pretty much everything we're likely to do.

By Ezra Klein  |  June 30, 2010; 9:48 AM ET
 
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Comments

What about ending the wars in Iraq and Afghanistan and using the money to put Americans to work rebuilding our crumbling infrastructure and developing cleaner energy technology? Talking to people, this is the solution I hear most but our elected officials avoid it like the plague and the press refuses to question the official line that we can't just withdraw from either war so the wars never end and the public is told either lies or nothing about what's going on on the ground. I will only vote for candidates with the guts to call for cuts in defense rather than social programs which have never been more sorely needed.

Posted by: dnahatch1 | June 30, 2010 10:02 AM | Report abuse

I don't "worry" but you, Ezra, were so worried that you went out and deleted Journolist ; )

Posted by: JakeD2 | June 30, 2010 10:28 AM | Report abuse

@JD2: gratuitous threadjacking on the second post? Not you....

"I don't agree that we've done "everything anyone can think of," but I do agree that we've done pretty much everything we're likely to do."

What gutless congresscritters we have. Why isn't 9.7% unemployment considered an economic emergency? Do congresscritters understand countercyclical spending in a recession? Every dem in congress should be shouting "Why won't they ALLOW A VOTE on unemployment extension? Answer: Republicans are trying to tank the US economy for partisan political gain. "

Posted by: srw3 | June 30, 2010 12:43 PM | Report abuse

Reduce the minimum wage - even temporarily. I'll just bet there are quite a few willing employers and workers at lower wage levels.

Posted by: tbass1 | June 30, 2010 1:42 PM | Report abuse

my own guess is that the market will get everyone's attention at some point in the coming months.

the stock market, that is, and stock markets around the world will be forecasting a grim future while bond prices will remain low, and at the margin, some dullard blue dogs might realize that in these circumstances, fiscal stimulus remains the only choice.

Posted by: howard16 | June 30, 2010 2:15 PM | Report abuse

There needs to be some big "everybody panic" moment that pushes action on unemployment. In some ways this tepid recovery is the worse of all possible worlds because it keeps lots of people out of work while allowing just enough growth to avoid big layoff headlines that drive political action. When the bleeding is diffuse and constant, it just becomes background noise for Washington.

If that moment occurs, we'll be lucky if it comes before the next Congress is in session. It's virtually guaranteed that the Republicans will do everything possible to keep the country mired in high unemployment and economic uncertainty until 2012. If they, say, control the House, they'll use a new fall back into recession to bash Obama rather than to do anything constructive to right the economic ship.

Posted by: NS12345 | June 30, 2010 2:53 PM | Report abuse

"We've already done about everything anyone can think of to stimulate the economy."

Oh, ma, gawd.

Please make the stupid stop.

"The trash is piling up in the kitchen!"

"Well I took the trash out last week, therefore taking it out again is pointless. Therefore... let's burn the house down."

Posted by: howlless | June 30, 2010 3:36 PM | Report abuse

Paul Krugman in the New York Times predicted this. The initial stimulus package was smaller than the Keynesians called for, and was made worse by shifting about 1/3rd from direct payments to tax cuts, which have a lower multiplier effect. Krugman predicted that if the first program failed, the politicians would be resistant to a second try. We can now look forward to our own version of the Lost Decade, except that it may take considerably longer than 10 years with the Hooverites calling the shots.

Posted by: su10 | June 30, 2010 5:24 PM | Report abuse

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