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Time for more economic stimulus

Another bad jobs report today - only 69,000 jobs created in May. And investor money is pouring into the safe haven of U.S. Treasury bonds, driving the 10-year yield down to 1.45%. The government's response should be a simple one, as Felix Salmon notes:

The government can borrow at 1.45%: it should do so, in vast quantities, and invest that money back into the economy itself. Take a few hundred billion dollars and use it to fix our broken infrastructure, to re-hire all those laid-off teachers and firefighters, to provide some kind of safety net for the millions of Americans who have been out of work for more than a year.

The last stimulus plan, enacted by President Obama shortly after his election, stabilized the economy in the wake of the financial crisis and helped us avoid a depression. We need more stimulus - borrow cheap, spend, put people back to work and get money flowing to revive the sluggish economy. And never mind the Republican hysteria over the country going deeper into debt - their only economic plan is to cut taxes, a strategy which generated only meager growth during the Bush Administration and would now increase the national debt even more than Salmon's "few hundred billion dollars" of stimulus. Do it now, President Obama, regardless of election year concerns. Voters would surely look more favorably on doing something, anything, to boost the economy, instead of doing nothing. Do it now.

June 1, 2012 in Current Affairs | Permalink