Congressional Democrats talk up second economic stimulus package
Posted by: admin in Industry NewsFiled under: Industry, Politics, Recession
First the good news: Congressional Democrats are talking up the idea of a second fiscal stimulus package to help jump start the U.S. economy.
Now the bad news: Congressional Democrats are talking up the idea of a second fiscal stimulus package to help jump start the U.S. economy.
U.S. House Speaker Nancy Pelosi, D-California, stated she would raise the prospect of a second stimulus bill when she and other Congressional leaders meet with President Bush this week, CNN reported Monday.
Anemic U.S. economy
Speaker Pelosi didn’t provide specifics but stated March 2008’s “disturbing unemployment numbers” which indicated the nation’s economy lost 80,000 jobs “compels the President to work with Congress on a second stimulus package to get our economy back on track, create jobs, and speed assistance to families struggling to make ends meet,” CNN stated.
On Monday, the Bush Administration stated it was too soon to talk about the need for a second economic stimulus package because the first one hadn’t been fully implemented yet, Reuters reported.
Political Analysis: It sounds like the first volley in the second fiscal stimulus package debate. Congressional Republicans would like to see this issue quickly become a non-starter, due to the increased social spending a potential stimulus bill would contain. Three months ago, a second stimulus package would have seemed far-fetched. This day it’s a long-shot: President Bush would probably veto the bill, and the Dems don’t have the votes to override it. However, three months from now. If U.S. economic conditions continue to deteriorate, electoral pressure may be so great on incumbent Congressional Republicans that they may have to support a second package, and press President Bush to sign it.
Economic Analysis: There’s more than enough work that needs to be done in the United Says (infrastructure, renewable energy, school/hospital construction, among other projects) to justify a second fiscal stimulus package. Further, the package would contain the additional advantage of creating many living-wage jobs primarily in the 50 states, not overseas. That said, the factor that’s most prone to determine the fate of ‘fiscal stim 2′ will undoubtedly be the U.S. economy itself. If the recession is shallow, no stimulus will be needed. If it isn’t, the nation may have no other choice but to provide additional fiscal stimulus. Hence, a second fiscal package would be bitter-sweet: it could provide stimulus, but the economic slump required to pass it would be something no American would want to see.
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