$787 billion was “a bit too small”
I’m just not sure what to make of all of the ‘yes we do’, ‘no we don’t’ and ‘well maybe, but not now’ that’s coming out of the administration and its advisers.
All three view points are being reported here via Drudge
The U.S. should consider drafting a second stimulus package focusing on infrastructure projects because the $787 billion approved in February was “a bit too small,” said Laura Tyson, an outside adviser to President Barack Obama
Now correct me if I’m wrong but wasn’t infrastructure projects and the much needed employment that these things are suppose to produce, one of the main reasons given for the first Obama stimulus. Now I’m not sure how we are going to pay for all of this but
Tyson, 62, later told reporters that the U.S. can afford to pay for a second package, even as the fiscal deficit soars. She said the budget shortfall is “likely to be worse” than the equivalent of 12 percent of gross domestic product that the administration forecast for 2009 and the 8 percent to 9 percent it projected for next year.
The professor at the University of California’s Walter A. Haas School of Business downplayed worries from China and other countries with dollar reserves that the U.S. will let inflation soar as the deficit expands.
“The concern is that the U.S. will have to inflate away its debt. I do not think that is a valid concern,” she said. “The Federal Reserve is not going to let the U.S. government inflate away its debt.”
The U.S. needs to communicate its determination to reduce the annual shortfall once the economy recovers, she said.
Tyson’s comments contrast with remarks made two days ago by Vice President Joe Biden and fellow Obama adviser Austan Goolsbee, who said it was premature to discuss crafting another stimulus because the current measures have yet to fully take effect.
Obama said last month that a second package isn’t needed yet, though he expects the jobless rate will exceed 10 percent this year. When Obama signed the first stimulus bill in February, his chief economic advisers forecast it would help hold the rate below 8 percent.
And of corse unemployment is now sitting at 9.5% and heading skyward. And given the fact that
“The economy is worse than we forecast on which the stimulus program was based,” Tyson, who is a member of Obama’s Economic Recovery Advisory board, told the Nomura Equity Forum. “We probably have already 2.5 million more job losses than anticipated.”
What does that say about how much we should trust the Obama economic team. I know that I don’t.