There some general wonkery in his piece the nut is this:
[...] unemployment insurance puts money in the pockets of the families most likely to spend the money – which in turn expands the economy and creates jobs. The nonpartisan Congressional Budget Office has identified increased aid to the unemployed as one of the two most cost-effective policy options for increasing economic production and employment."
Last February, Doug Elmendorf, director of the Congressional Budget Office reported to Congress on how to deal with the employment situation. Again, lots of wonkery, but here's the nut:
Additional government spending would also boost output and employment, both directly through the government-funded activity and indirectly through increases in consumers’ demand for goods and services resulting from the higher income of the households and firms that directly benefited from the government activity. The federal government can boost demand by increasing its own purchases of goods and services or by providing funds to state and local governments to increase their purchases of goods and services.
Granted there was much caveating regarding the amount of time it would take for the effects of such stimulus to take effect and that it would possibly have a long term effect on deficits and national growth.
Fine. If the house is on fire and water is available, you don't haggle over the cost of the hose. We will deal with that when it comes. Moreover, the time aspect of this makes me think the time to act is now. In reality, it was late last year, but every day the GOP members of the House and Senate delay is a day we are not healing, but actually getting sicker.
I am at best an arm chair economist, but if I read the numbers in the annex right, it looks like spending the money now starts to have an effect almost immediately on full time equivalent (FTE) employment numbers. Extending aid to the unemployed would generate between 4 and 7 years worth per million dollars spent just this year and between 7 and 15 years of FTE by 2015.
Moreover: "initial reductions in revenues are nearly fully offset by later increases. The policy’s effects are therefore estimated per dollar of the present discounted value of the policy (discounted at the businesses’ cost of debt and equity) instead of per dollar of total budgetary cost."
Now I'm not entirely sure what that all meant, but it sounds like since an initial loss in money is made later by increases in employment and production we don't have to look at the overall effect on the budget but can base the real cost of the policy in what it costs in real terms right now.
And frankly, I'm not sure the CBO's report took into account the news from the Council of Economic Advisors on the most recent outlook for recovery due to the Stimulus Bill.
Given all this, why isn't White House doing more than releasing blog posts through the CEA? Why isn't the President out on the trail calling out Republicans for screwing working Americans?
Biz and I were chatting yesterday and he made a pretty good point about something: this White House has the greatest orator and rhetorical engineer of our generation in the Oval Office, and it's not like there's a shortage of cameras in there.
So it begs the question: Why isn't the President himself out there making a full court press for his agenda items from the "Bully Pulpit?"
Summers quoted the President from last April saying:
Lasting unemployment takes a toll on families, takes a toll on marriages, takes a toll on children. It saps the vitality of communities, especially in places that have seen factories and other anchoring businesses shut their doors. And being unable to find work – being able to provide for your family – that doesn’t just affect your economic security, that affects your heart and your soul. It beats you up. It’s hard.”
But I don't need Summers to be telling me the President said this. I need to see the President out there saying this. Everyday, the President should be making this case to the American people, and making sure that those responsible for holding up the aid – Republican and Democrat – will be held accountable.
Now, some will say the Republicans are trying to deliberately ratfzck the economy. Yeah, I believe that's possible, even likely in some individual instances. And if that's the case, then those are not people who are going to be won over.
But there are a lot of people out there right now who think that the President is just impotent on this issue. It's time to push back and get into campaign mode.
Because, seriously, if we can't win on this one; if we can't convince the American people that spending to help 2.5 million of their friends and neighbors keep a roof over their heads and food on the table is not only a moral necessity but a pragmatic economic imperative, then we don't deserve to be in charge...
mojo sends
