Re: [Pen-l] CBO on HR 1

[Jim Devine <jdevine03@xxxxxxxxx>]

Julio Huato wrote:
> ...  I
> understand the urgency of these measures.  Timing is essential.  But I
> don't think Obama has only one shot at this.  Setbacks can be turned
> into victories....
>
> As blissfully ignorant as I am of the concrete legislative process in
> the U.S., I am sure that Obama and his people will have more
> opportunities to advance, should they want to -- and/or be forced to
> -- advance.

It's absolutely true that the ostensible inadequacy of the Obama
stimulus plan (especially after being compromised) and the Geithner
rescue plan can be addressed in the future, when leadership is more
confident or organized and the political balance has changed (say,
after the 2010 Congressional elections or due to a deepening
recession).

But this inadequacy means that the needed stimulus and rescue are
delayed, so that the rise in unemployment is larger and more sustained
and the financial problems are deeper and more prolonged. The more
these are profound or sustained, the more permanent the scars are:
draining of households' savings (to the extent they have any),  more
accumulation of their debt (if anyone will lend), more foreclosures
and bankruptcies, and more homelessness).

The idea was that early intervention could effectively keep
unemployment from rising up to 9 or 10%. But that chance at early
intervention seems to be passing, as we transition from "early" to
"late."
-- 
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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