Econ 101

Well, the Congressional Budget Office (CBO) (which is non-partisian) reports the recession will end by the end of this year.

Entire report here. The excerpt below is from page 2….any emphasis mine.

CBO anticipates that the current recession, which started in December 2007, will last until the second half of
2009, making it the longest recession since World War II.

(The longest such recessions otherwise, the 1973–1974 and 1981–1982 recessions, both lasted 16 months. If the current recession were to continue beyond midyear, it would last at least 19 months.) It could also be the deepest recession during the postwar period: By CBO’s estimates, economic output over the next two years will average 6.8 percent below its potential—that is, the level
of output that would be produced if the economy’s resources were fully employed (see Figure 1).

This recession, however, may not result in the highest unemployment rate. That rate, in CBO’s forecast, rises to 9.2 percent
by early 2010 (up from a low of 4.4 percent at the end of 2006) but is still below the 10.8 percent rate seen near the end of the 1981–1982 recession.

The Near-Term Outlook
In preparing its economic forecast, CBO assumes that current laws and policies governing federal spending and
taxes do not change. This forecast, therefore, does not include the effects of a possible fiscal stimulus package.
On that basis, CBO anticipates that real GDP will drop by 2.2 percent in calendar year 2009, a steep decline.
CBO expects the economy to begin a slow recovery in the second half of 2009 and to grow by a modest 1.5 percent
in 2010 (see Table 1).

So, if the above is to be believed, and the empirical evidence suggests the above is correct, then THAT means the +-$Trillion package is moot and irrelevant. In other words, the stimulus package should be abandoned. Of course, we know that won’t happen for the following reasons:

1) Democrats are too stupid to understand the above and;
2) See #1

You might want to call your Senator (and if necessary, your Representative) and point out the above. Actually, what you should do is have your children and grandchildren make those calls…..they will bear the brunt of paying for the phony stimulus.

Of course, it won’t make any difference, Dems love to spend your money. Why not? None of them seem to pay taxes anyway.

By the way, China and other creditor nations have pretty much turned off the spigot for buying US$ obligations. This means the presses will roll which, unless there is some new economic reasoning and history I’m not aware of, will be massively inflationary. Can anyone say “Jimmy Carter and Stagflation”? No? How about “The Misery Index” (inflation + unemployment)? How about a Prime Rate of 22%? Maybe Congress should pay attention to their economic history, too.

Oddly enough, I don’t recall seeing any news stories on the above in the MSM.