Obama Rejects 2nd Stimulus..."Give Recovery Time"

[rockin'robin]

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.

The stimulus included $288 billion in tax cuts, dramatic increases in Medicaid spending, about $48 billion in highway and bridge construction and billions more to boost energy efficiency, shore up state budgets and improve schools.

The plan "was not designed to work in four months," Obama said. "It was designed to work over two years."

Since Obama signed the stimulus into law, the economy has lost more than 2 million jobs and the unemployment rate has climbed higher than the White House predicted it would have ever reached without the stimulus.

Some companies say stimulus money helped avoid layoffs. Independent government auditors found that stimulus aid to states helped keep teachers off unemployment lines. But overall job numbers continue to suffer.

Republicans have seized on this opportunity to criticize the president, but they have struggled to find their collective voice. At a news conference Friday, Republican lawmakers criticized the White House for spending so much, while simultaneously saying the administration wasn't spending it fast enough.

With the Obama administration now pushing for a costly overhaul of the nation's health care system, Republicans are casting Democrats as liberals on a shopping spree. In the GOP's weekly address Saturday, Virginia Rep. Eric Cantor, the House Republican whip, accused the Democratic-controlled Congress of reckless spending and careless borrowing.

Though the Republican stimulus proposal this January had its own deficit-pushing price tag of $478 billion, Cantor and Republicans are trying to make their case against Obama as one of fiscal restraint.

"For the stimulus alone, Washington borrowed nearly $10,000 from every American household," Cantor said. "Let me ask you: Do you feel $10,000 richer today?"

In his speech, Obama twice referred to "cleaning up the wreckage" of a recession that began on President George W. Bush's watch. But with Obama's poll numbers slipping on economic issues, Republicans want to lay the economy at the president's feet.

"This is now President Obama's economy," Cantor said.

Obama rejects 2nd stimulus: Give recovery time - Yahoo! News

 

[sequoias]

Nothing new with Republicans attacking on Democrats, it will never end. Like he said, give it time until it recovers. It's impossible for economy to recover that quickly. It always go bad before it gets better.

 

[Steel X]

Nothing new with Republicans attacking on Democrats, it will never end. Like he said, give it time until it recovers. It's impossible for economy to recover that quickly. It always go bad before it gets better.

True. If money is really tight for many of us, then its tight for the WHOLE country...even the world.

 

[Jiro]

SHOW ME THE MONEY!

 

[Jiro]

$1 Trillion Deficit Complicates Obama's Agenda

WASHINGTON -- The U.S. federal budget deficit broke through the $1 trillion mark in June, potentially complicating the Obama administration's efforts to revive the economy and enact its longer-term policy agenda.

The U.S. Treasury Department on Monday said the government's annual deficit reached almost $1.1 trillion by the end of June, a once-unthinkable level that could threaten any nascent economic recovery by undermining the dollar and driving up interest rates.
MORE

* Real Time Econ: White House Outlines Jobs Future

Surging deficits could also tie the administration's hands in responding to the economy's problems, by eroding support among voters and making Congress leery of adopting policies -- such as an overhaul of the health-care system -- that the administration believes are necessary for sustainable growth.

It could be hard to win congressional approval for another round of fiscal stimulus, if that was seen as necessary, even as the economy continues to lag and the unemployment rate continues to rise, hitting 9.5% in June.

Some budget experts questioned whether lawmakers had the political will to take steps -- such as tax increases and spending cuts -- to help get the deficit under control.

"Most anybody who's being honest knows we've reached a point where we've got a very dangerous fiscal situation, and it won't fix itself," said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget. She said the White House and Congress should negotiate a broad plan to reduce deficits now.

President Barack Obama on Monday stressed the importance of enacting health-care legislation as a way to bring down long-term deficits. A spokesman for the White House Office of Management and Budget, Kenneth Baer, termed health-care reform "the key to our fiscal future."

But some budget watchdogs worry that Congress eventually could pass health-care legislation that relies on uncertain long-term savings, while substantially increasing short-term government expenditures.

The Obama administration in May estimated that the annual deficit would hit about $1.84 trillion by the end of the fiscal year, an increase from February's projection of $1.75 trillion. The administration also slightly revised upward its deficit estimates for 2010 and 2011, to $1.26 trillion and $929 billion, respectively.

Slumping tax receipts, particularly from corporations and individual investors, have contributed substantially to the widening gap, as has rising spending on social safety-net programs, economic-stimulus measures and aid to auto and financial companies.

By historical standards, the 2009 deficit -- at 13% or more of the country's gross domestic product -- would be the U.S.'s biggest since the end of World War II in 1945, when it reached 21.5%.
[deep impact]

Some economists said the growing deficit hasn't had much impact on interest rates so far, despite a brief spike a few weeks ago. In part, that is because private-sector borrowing remains weak. Meanwhile, demand continues to be strong for the Treasury debt used to finance the government's deficit spending.

"The private-sector retrenchment is allowing the Treasury to raise a lot of funds at very low interest rates," said Jan Hatzius, chief U.S. economist for Goldman Sachs & Co. "There's a lot of demand" for federal debt.

Some economists also say the 2009 deficit doesn't appear to be deepening as rapidly as once feared. Still, high deficit projections, along with rising unemployment rates, appear to be starting to hurt Mr. Obama politically. Some lawmakers from both parties are expressing concern about the potential tab for a health-care overhaul, which could cost the government up to $1 trillion over the next decade if spending isn't offset by tax increases and savings.

"This trillion-dollar deficit makes clear that our nation's fiscal situation is dire, yet Washington Democrats keep borrowing and spending money we don't have and forcing our children and grandchildren to foot the bill," House Minority Leader John Boehner said in a statement Monday.

Some Democrats are also worried about the deficit, particularly the so-called Blue Dog moderates in the House. Rep. Charlie Melancon of Louisiana, the coalition's co-chairman, called for new budget restraints to be imposed on Congress.

"Our budget deficits didn't appear overnight and won't magically go away tomorrow," he said in a statement. "The Blue Dogs are working with the President and leadership in Congress to reinstate" pay-as-you-go rules that would require Congress to come up with budget cuts to offset many new programs.

tsk tsk tsk......