In the face of the bad news about unemployment rising to 9.6 percent from last month’s rate of 9.5 percent there are reports that the White House is considering an emergency economic stimulus.
Politico said today that “the Obama administration is mulling a raft of emergency fixes to stimulate the economy before the midterms, including an extension of research and development tax credits and new infrastructure spending.”
Administration officials have been reportedly meeting all week discussing proposals that would boost employment, “without hiking the federal deficit.”
Treasury Secretary Timothy Geithner, according to some of the reports, rushed to the White House Thursday night to join the talks.
The White House press office refused to estimate the size of the financial package under consideration but said it would not be a “second stimulus.”
Politico said Obama would have a “tough time selling any package to Obama-phobic Hill Democrats who increasingly blame the president and his expansive legislative agenda for their dismal prospects this November.”
“Republicans have tried to block every other previous attempt to jump start the economy, so despite the obvious need, I can’t imagine that anything has changed,” said a spokesman for Senate majority Leader Harry Reid, D., Nev.
The Center for Economic Policy and Research’s Dean Baker said, “We can run a deficit that is pretty much as large as we want in a period of high unemployment like the present. This does not have to create a debt problem because the Fed can just buy and hold the debt.” He said that then interest on the debt would be paid to the Fed which could then refund the Treasury. When people are back to work, increased revenue from taxes and other sources would reduce the deficit over the longer term.
After a White House session, outgoing Economic Advisory Council chair, Christina Romer, declared: “We cannot allow the deficit to be an excuse for leaving the unemployed to suffer.”
Just before Labor Day, Liz Shuler, Secretary-Treasurer of the AFL-CIO, described in graphic terms the meaning of joblessness for the nation’s youth.
“So what does this mean beyond just a bunch of teens without gas money, a few new video games or an outfit their parents won’t finance? Plenty. A May report in the National Journal described the plight of young workers as a broken escalator.
“Instead of young people getting on at the bottom and smoothly travelling to the top throughout their careers, workers already near the top are losing jobs and going backward, blocking young people trying to get on. Older workers who can’t afford to retire aren’t stepping off the escalator to make room for new ones.
“And with jobs still disappearing, the escalator has all but stalled.”