In it, but not of it. TPM DC

Progressive Caucus Steps it Up on the Stimulus

The economic recovery package outlined yesterday is an essential means of providing Americans the relief that they desperately need. But, as is currently proposed, it is too small. We are all in agreement that we need a large economic stimulus bill to halt job losses and inject enough aggregate demand into the economy to avert a depression. Every economic indicator points to the risk of a real depression if we do nothing.

However, according to a report by Christina Romer (Chair-designate of President-elect Obama's Council of Economic Advisers) and Jared Bernstein (Chief Economist and Economic Policy Adviser-designate to Vice President-elect Biden), even with this plan, we could still see unemployment rates of 7% by the end of 2010, when the recovery plan is expected to have its strongest effect, and average unemployment rates of 7.3% for three years.

Nobel Laureate Paul Krugman wrote: 'That's a scary number, big enough to pose a real risk that the U.S. economy will get stuck in a Japan-type deflationary trap.'