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Thursday, May 14, 2009

After $1 Trillion Porkulus Bill: Nothing Has Changed

More Good news from the White House:

President Obama's chief economics forecaster said on Sunday that the country was not likely to see positive employment growth until 2010, even if the economy began to grow later this year. Speaking on C-SPAN, Christina Romer, chairwoman of the White House Council of Economic Advisers, said that she expected the G.D.P. to begin growing in the fourth quarter of this year. Ben S. Bernanke, the Federal Reserve chairman, made a similar prediction last week.

But Ms. Romer also said that she expected unemployment to rise even after the economy turns, saying that the G.D.P. has to grow at a rate of about 2.5 percent before unemployment will fall. Before that happens, she said, it is "unfortunately pretty realistic" that the unemployment rate could reach 9.5 percent. A reasonable estimate for the G.D.P.'s growth rate in 2010, she said, is three percent. Robert Reich, who served as labor secretary under President Bill Clinton and advised the Obama campaign, said on Sunday that the rate of growth would have to be higher - 4.5 percent - to reverse rising unemployment.

So, the almost $1 Trillion in Porkulus Bill that was supposed to save and create millions of jobs and jumpstart the economy has done absolutely nothing.

To call this a stimulus bill is a joke. Keynes himself wouldn't even call it stimulus. Most of the money hasn't been spent yet and won't be until 2010 and 2011. Again, what was the rush in getting the bill crammed down our grandchildren's throats?

This just another failure of the young Obama presidency.

What does Romer conclude will get us out of this recession:

The economic recovery, Ms. Romer said, will be driven by business investment in sectors like renewable energy rather than consumer spending. She echoed the views of other economists who expect a long-term economic shift.

So, business investment not consumer spending will bring the economy back. That's what the conservatives have been saying this whole time. Tax cuts has been proven to inspire business investment not massive government spending.

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