Great news: Democrats already gearing up for second stimulus; Update: 53% believe U.S. is entering depression

I’m confused. The first stimulus, we were assured, “created or saved” three million jobs. Do we need to create or save those jobs again so soon or will this new bill be creating or saving more?

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Prediction: By 2010, The One will have “saved” every job in America.

“We are going to need more taxpayer money,” Mark Zandi, the chief economist at Moody’s Economy.com and a key economic advisor to Congressional Democrats, said after the meeting. “I think another stimulus package is a reasonable assumption because of the way things are going.”

House Speaker Nancy Pelosi (D-Calif.), standing with members of her leadership team by Zandi’s side, said she agreed that another stimulus bill is being considered as an option.

“We have to keep the door open,” Pelosi said. “The word of the day is confidence. Confidence in our markets, confidence in lending, confidence in our financial institutions.”

Nothing says confidence like an endless string of multibillion-dollar emergency bailouts. Consider this piece a timely companion to David Smick’s op-ed this morning calculating that banks may need another $2 trillion in TARP before they’re safely solvent again. Presumably that money would be on top of whatever other stimulus is to come, not part of it, so perhaps it’s time for Obama to take Smick’s advice and broadcast the mother of all fireside chats:

I suspect Obama’s advisers would like nothing more than to dismantle an irresponsible firm such as Citigroup. They are afraid to do so, for one reason: All the big banks are connected to a potentially lethal web of paper insurance instruments called credit default swaps. These paper derivatives have become our financial system’s new master…

The Obama team needs to remember that we got into this mess because of a lack of financial transparency. It’s time to tell the American people what the stock market already knows: that the path to recovery will probably be expensive and politically unpopular, perhaps explosively so.

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I remember asking months ago after the grumbling about TARP began for someone, anyone, to give us a final pricetag on what it’s going to cost to fix this. Either they don’t know yet or they do know but fear that the amount’s so staggering that there’s no way they can ask for a lump sum lest even that prove to be on the low side and they’re forced to come begging for more. So they’re going to ask for it piecemeal, which is financially prudent but politically very dangerous. If you tell the public “We can fix this with $3 trillion,” you might get it; if you come begging for another $700 billion every six months, not only do you look like you don’t know what you’re doing but you might get cut off before you have all the money you need. Exit question: Which is smarter, demanding a lump sum or proceeding in stages?

Update: Ah, here’s the answer to my opening question now. Turns out Stimulus I is already a partial failure in “creating or saving” 3.5 million jobs, which is why we need Stimulus II. I wonder where that leaves us with the cost-per-job calculation. It was roughly $200,000. Anyone want to try recalculating, or at least guessing what it’ll be after Stimulus II? I’ll say, oh, $500,000.

The report by a group of economists including Mark Zandi, chief economist of Moody’s Economy.com, says the recently enacted $787 billion stimulus package will fall far short of the Obama administration’s goal of saving or creating 3.5-million jobs.

Zandi said only 2.5 million jobs will be saved or created over the next two years, and told House Democrats that a second stimulus is needed as well as more money for banking stabilization and housing.

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Update: The GOP’s floating a new stimulus plan of their own. It hasn’t a prayer of passing, but you’ll find it more to your liking.

Update: Tell us again about “confidence,” Nancy.

Most Americans (53%) now think the United States is at least somewhat likely to enter a 1930’s-like depression within the next few years…

The latest results are more pessimistic than those found in early January, when 44% said a 1930’s-like depression was likely in the next few years, and 46% disagreed.

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Ed Morrissey 10:00 PM | May 20, 2025
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