With Jobs Recovery “Still Years Away,” Dems Seek Second “Stimulus”

June 24, 2011

Despite “Daunting” Deficits, Democrats Call for Even More Stimulus Spending While They Confess That the Last Stimulus Failed

Federal Reserve Chairman Ben Bernanke said Wednesday that a full jobs recovery is “still years away,” just hours after the Congressional Budget Office forecast “daunting” long-term budget deficits. Jobless claims also rose higher this week, showing “persistent weakness in the job market.”
Those sobering economic facts haven’t stopped Democrats from calling for yet more stimulus spending, even though they admitted that the last stimulus spending spree failed.
This bizarre insistence on repeating failed policies must be why increasing numbers of Americans continue to disapprove of Democrats’ handling of the economy.

BACKGROUND:

Federal Reserve Chairman Ben Bernanke said Wednesday that the U.S. is “still years away” from reducing its unemployment rate to pre-recession levels of about five percent:

“Ben Bernanke, chairman of the Federal Reserve, said a truly frightening thing at his just completed press conference, even if he wasn’t breaking new ground.

“He said the U.S. economy is ‘still years away’ from what is considered a level of full employment, meaning an unemployment rate somewhere in the range of 5%. It stands now at 9.1%.” (Neal Lipschutz, “Bernanke’s Scary View of Employment,” The Wall Street Journal, 6/22/2011)

JOBLESS CLAIMS CONTINUE TO RISE, “POINTING TO PERSISTENT WEAKNESS IN JOB MARKET”: “More unemployed Americans filed for new jobless benefits last week, pointing to persistent weakness in the jobs market.” (Luca Di Leo, “Jobless Claims Move Higher,” The Wall Street Journal, 6/23/2011)

Bernanke’s announcement came just hours after the CBO declared long-term U.S. deficits to be “daunting.” And just yesterday, CBO head Doug Elmendorf declared that the nation’s debt is “likely slowing the nation’s economic recovery”:

CBO: LONG-TERM DEFICITS “DAUNTING”: “Budget deficits will probably drop in the next few years, but long-term prospects are ‘daunting’as spending on entitlements and health care spikes, the federal agency charged with keeping tabs on Congress said Wednesday.

“The Congressional Budget Office said that under one scenario that adheres closely to current law, the total federal debt will grow from about 69% of GDP this year to 84% by 2035. That scenario assumes that the Bush-era tax cuts and other policies expire.” (Robert Schroeder, “Long-Term Budget Outlook ‘Daunting,’ CBO Says,” MarketWatch, 6/22/2011)

FEDERAL SPENDING TO TOP WORLD WAR II LEVELS: “The CBO’s newly released 2011 Long-Term Budget Outlook forecasts that federal spending will soon exceed spending during parts of World War II.” (Jeffrey H. Anderson, “CBO: Federal Spending Will Soon Exceed Spending During Parts of WWII,”The Weekly Standard, 6/22/2011)

CBO HEAD: GOVERNMENT POLICIES, DEBT “LIKELY SLOWING THE NATION’S ECONOMIC RECOVERY”: “Uncertainty about federal policies combined with the threat of long-term debt is likely slowing the nation’s economic recovery, the head of the Congressional Budget Office said Thursday.” (Vicki Needham, “CBO Head: Government Policies, Debt May Be Slowing Economic Growth,” The Hill, 6/23/2011)

Recent bad news about the economy hasn’t stopped Democrats from calling for yet more stimulus spending, despite the fact that they have widely acknowledged that the last one failed:

“DEMOCRATS PUSH NEW STIMULUS”: “Senate Democrats kicked off their new drive for a jobs agenda by demanding that new stimulus measures be included in the bipartisan deficit reduction talks led by Vice President Joseph Biden.” (Steven T. Dennis, “Senate Democrats Push New Stimulus,” Roll Call, 6/22/2011)

IN OTHER WORDS, DEMOCRATS’ PLAN TO REDUCE SPENDING IS TO SPEND MORE? ” ‘This is a stimulus program,’ said Sen. Charles Schumer (D-N.Y.), the No. 3 Democrat, adding that a package would be paid for in the long run as part of the deficit reduction package.” (Steven T. Dennis, “Senate Democrats Push New Stimulus,” Roll Call, 6/22/2011)

WHILE EVEN PRESIDENT OBAMA JOKES ABOUT HIS LAST FAILED STIMULUS … HA HA?: “Obama smiled and interjected,‘Shovel-ready was not as … uh .. shovel-ready as we expected.’ The Council, led by GE’s Jeffrey Immelt, erupted in laughter.” (“Obama Jokes at Jobs Council: “Shovel-Ready Was Not as Shovel-Ready as We Expected,” Fox News, 6/13/2011)

This bizarre insistence on repeating the same mistakes explains why broad majorities of Americans continue to disapprove of the Democrats’ handling of the economy:

BLOOMBERG: PLURALITY SAY THEY ARE WORSE OFF UNDER OBAMA: “By a 44 percent to 34 percent margin, Americans say they believe they are worse off than when President Barack Obama took office in early 2009, when the U.S. was in the depths of a recession compounded by the September 2008 financial crisis and the economy was losing as many as 820,000 jobs a month.” (Mike Doming, “Poll: 44% of Americans Worse Off Under Obama,” Bloomberg, 6/22/2011)

EVEN DEMOCRATS TRUST GOP OVER PELOSI & OBAMA ON ECONOMY, JOBS. “As the public grasps for solutions, the Republican Party is breaking through in the message war on the budget and economy. A majority of Americans say job growth would best be revived with prescriptions favored by the party: cuts in government spending and taxes, the Bloomberg Poll shows. Even 40 percent of Democrats share that view.”(Mike Doming, “Poll: 44% of Americans Worse Off Under Obama,” Bloomberg, 6/22/2011)

AP-GfK POLL: DISAPPROVAL OF OBAMA’S HANDLING OF THE ECONOMY HITS NEW HIGH: “Obama has hit new highs he’d like to avoid – in public disapproval over his handling of the economy in general and unemployment in particular – according to a new Associated Press-GfK poll. In addition, more disapprove of his handling of health care and the federal budget deficit than in the past.” (Jim Kuhnhenn, “AP-GfK Poll: Slow Recovery Weakens Obama,” Associated Press, 6/22/2011)