No one being seating in the next Congress, the 111th United States Congress, is likely to accused of beating his wife, using the wrong fork, or passing gas while speaking with a head of state. Most of the members will probably be remembered at fat lizards who sat in the sun until it set, malingerers, and people who waited too long to pull the trigger when the recession got so savage that they weren’t sure what economic stimulus legislation to vote for and when.
Some Democrats and many Republicans want extensive debate on the scope of president-elect Obama’s economic stimulus package and how the new Treasury Secretary will use the $350 billion left for TARP spending.
According to ABC, Obama said in an interview "Here’s what we know though, that the sooner a recovery and reinvestment package is in place, the sooner we can start turning the economy around. We can’t afford three, four, five, six more months where we’re losing half a million jobs per month."
Based on the modest pace of the debate so far, those months may actually pass without any significant action to get large amounts of capital into the economic and financial systems.
Apparently the notion that unemployment hit 7.2% in December and it rising did not do enough to move some of the legislators to action. They may want to wait for horrible write-offs at the nation’s largest banks, or perhaps a big bank failure. They may need to wait to see the January unemployment, housing, and consumer and business spending packages.
The point has been made ad nauseam that an ill-formed stimulus package is better than no stimulus package at all. Perfection is not in the cards. Trying to save the economy will involve throwing money at the wall and hoping some of its sticks.
But, perfection is the issue. The Congress does not want to be viewed as spendthrifts who gave no regard to the burden they are putting on taxpayers or boobs who picked the wrong programs to get things back on track. Perhaps it is better to be prudent and blame the failure of the economy on leverage that has built up over that last decade ruining housing, bank earnings, and causing credit excesses.
The Las Vegas odds are now running 10-to1 against Obama getting his stimulus plan through Congress before the spring equinox.
The programs that involve spending $700 billion to "fix" the economy are complex enough so that they will not be able to effect the course of unemployment and falling GDP before the middle of the year and that is if things go perfectly. A multi-month delay of starting the process means that the crisis building around the recession cannot be addressed at all until next year.
Douglas A. McIntyre