All the Energy of a Snowflake

U.S. President Barack Obama put through a $789 billion assistance package for the economy. Washington needed to risk more, but Republicans prevented that. Their proposal to make more tax cuts won’t do the job.

A gentle tap is supposed to do the job, yet a hard kick is needed. The economic stimulus package, agreed to in Congress after a great deal of bickering, is disappointing. It’s far too weak to get the sluggish economy moving again.

The $789 billion dollar package is spread over two years, and consists of tax cuts, social services and infrastructure investment. Is it a lot of money? Of course it is. However, experts say that would still leave an output gap of three trillion dollars over that period. Measured against what’s needed, this stimulus package has all the kinetic energy of a snowflake. Washington should have ventured for more.

The Chinese already enacted their package in November. The Chinese package amounted to 16 percent of their total economy; the United States package amounts to slightly more than a mere 5 percent. Obama’s administration is going into its most important battle, the fight against recession, on a pretty puny scale.

The Republicans are to blame for that. They brought the power of their blockade into the Senate, and pruned down the economic program, while watering it down with tax cuts that not even conservative economists think will help, now that the crisis is so deep. There’ll be far less allocated for schools and health insurance than had been planned.

The bill for this false economy will come in the form of evil tidings from the employment sector. Two-digit unemployment figures were unthinkable in the U.S. for ages, but they may become reality very soon, perhaps as soon as this year.