As the $789 billion stimulus package works its way to a Presidential signature, it is becoming more apparent that it will land with dull thud—not quite the bang that has been promised.
In fact, just last week the Congressional Budget Office found it downright harmful long term.
But the CBO isn’t the only group that has misgivings about the package. Today, a group of economist has also weighed in. It doesn’t excite them either.
Here’s the story from Bloomberg by Timothy R. Homan and Alex Tanzi entitled: Obama’s Stimulus Not Enough to Avert Biggest GDP Drop Since 1946
“President Barack Obama’s stimulus plan will be insufficient to avert the biggest U.S. economic decline since 1946 as consumer spending posts its longest slide on record, according to a monthly Bloomberg News survey.
The world’s largest economy will contract 2 percent this year, half a percentage point more than last month’s forecast, according to the median of 50 projections in the survey taken Feb. 2 to Feb. 10. Even as Obama aims to create 3.5 million jobs with a stimulus plan, economists foresee an unemployment rate exceeding 8 percent through next year.
“Without the stimulus, I think we would be negative for all four quarters of 2009,” causing an even worse decline, said Nigel Gault, chief U.S. economist at IHS Global Insight Inc. in Lexington, Massachusetts. Even with Obama’s plan, consumer spending and the labor market are “spiraling down together,” he said.
U.S. gross domestic product will shrink at a 5 percent annual rate in the first three months of this year, with a 1.7 percent contraction from April through June, more than double the last forecast, according to the survey median. That would cap four consecutive quarters of decline, the worst performance since postwar record-keeping began.”
But hey, it’s not all bad news.
Officials now estimate the package will add about $13 a week to paychecks this year when withholding tables are adjusted in late spring. And next year, the measure could give workers about an extra $8 a week!
I kid you not. Don’t spend it all in one place.
I don’t know about you, but I feel more and more like a sucker everyday.
