Economists see no need for more stimulus

[HughMoran]

Economists see no need for more stimulus

Msnbc.com panel expects sluggish growth, high unemployment for 2010

No more stimulus, please, we're capitalists.

That’s the view, at least, of the majority of economists surveyed in msnbc.com’s year-end roundtable. Though unemployment will remain stubbornly high, and the economic recovery sluggish in 2010, the government doesn’t need to provide another round of stimulus spending to keep the economy afloat, they say.

The House last week narrowly approved a $155 billion “jobs” bill that includes nearly $50 billion in infrastructure spending and $79 billion for expanding benefits like unemployment insurance and Medicaid. But most of the forecasters in our panel are against the idea of another government stimulus package.

“The time to short-circuit the negative feedback from job losses is behind us,” said Ed Leamer is director of the UCLA Anderson Forecast. “Let the private sector heal the economy.”

Many feel the $787 billion package of tax cuts and new spending enacted in February spurred the rebound in the second half of this year. As the impact of that stimulus wears off, the expectation is that private spending by consumers and businesses will create enough demand to take up the slack.

“You have a floor (on growth) that comes from the fact that there’s an awful lot of latent demand out there that will slowly be tapped into,” said Joel Naroff at Naroff Economic Advisors.

The consensus of msnbc.com’s forecasters is that while growth will fade a bit next year, the economy will continue to expand at a slow but steady pace. After a 3.3 percent increase for the second half of 2009, gross domestic product growth is expected to slow to 2.6 percent for all of 2010, picking up a bit to 2.8 percent in 2011.

“Although the risk of a double-dip recession is still significant, it is not the most likely scenario,” said Diane Swonk, chief economist at Mesirow Financial. “Moreover, there are no silver bullets when it comes to fueling employment. I think our efforts would prove better if focused on improving the health of the credit market, most notably banks, as they are now the only game in town for many consumers and small businesses.”

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http://www.msnbc.msn.com/id/34452363/ns/business-person... /

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I personally think this is a pile of horsecrap, but I thought I'd throw it out there as the confidence (cockiness?) of these economists is at least something worth discussing.

[RoyGBiv]

1. Who the hell did they survey?

Is this like the survey where four out of five dentist recommend where they only survey five dentists, three of them are on the payroll, one was high on nitrous oxide and just picked the prettiest label, and the other doesn't really care?

Maybe it's in the article, and maybe I should read it, but I don't really want to because just this section of it tells me they didn't survey a representative cross-section. Ed Leamer is the idiot who argues we were overdue for this recession and, effectively, that it's actually a good thing, so I have absolutely no interest at all in listening to him. If he's representative of the people they surveyed, they need to find a new pool of opinion.

[HughMoran]

2. I agree - I think they surveyed the "dunce cap" economists

I just thought that the cockiness was interesting. They seem awfully confident that the economy is on a good footing now.

[RoyGBiv]

3. Yeah ...

It is interesting, in that hair-pulling way of being interesting. I guess, in a way, I'm glad to see this because it reminds me of what more rational economists are fighting against. Again with Leamer, whom I've unfortunately run across repeatedly while reading about related things previously, thinks two stupid things simultaneously.

He believes the economy is fine.

He thinks the stimulus that was instituted had basically nothing to do with it how fine it is, or in his words, "The Obama stimulus package has been pretty much irrelevant in the short run (this year) and will be downright harmful in the longer run. . ." He is one of these deficit hawks of the Friedman school who refuses to accept the use of short term deficits to battle unemployment or a recession, rejects pretty much everything Keynes ever argued, and as a matter of principle conflates short term, mid term, and long term deficits as the same thing.

For pity's sake the guy referred to the economic crisis that erupted in late 2008 as "a much needed break."

I *loathe* him.

The reality is that the economy is struggling and is only slightly above water because of the too small stimulus. I can find just as many PhDs in economics who say that and nothing but that as this article surveyed.

Sheesh.

[HughMoran]

4. And yet "Many feel the $787 billion package of tax cuts and new spending enacted in February spurred

"Many feel the $787 billion package of tax cuts and new spending enacted in February spurred the rebound in the second half of this year. As the impact of that stimulus wears off, the expectation is that private spending by consumers and businesses will create enough demand to take up the slack."

This crew actually does give credit to the first stimulus, but thinks that "pent up" demand will keep the economy from double-dipping. I think that's a bit foolish - I hope the "jobs bill" is passed by the Senate.

[RoyGBiv]

5. The jobs bill must pass ...

Completely agreed.

With Bernanke denying he has options, then agreeing he does have options but doesn't think he should use them, then once again denying that the options exist, we're left with a legislative solution as our only recourse. Bernanke is apparently having a rationalization problem and is just mucking up the works at the moment.

Ten percent unemployment for the next decade is not acceptable.

The jobs bill is a stimulus bill, but I hope the powers-that-be never, ever call it that, and I don't even care if the wonks on the right side of aisle are then able to invoke their inherent dishonesty to claim that stimulus packages don't work because this is a by-god emergency, and there are more important things right now. We can deal with how the Republicans will try to frame it as a matter of politics later. This is one of those things that, when it comes to selling it, presentation will unfortunately be far more important than substance, even if the substance is good.

[HughMoran]

6. jobs bill

sounds so much better than "Stimulus II"

[Kdillard]

7. Utter crap. We saw how well the private sector was at creating jobs during

The Bush Administration. Thankfully the Obama Administration and Dems are not buying. We can't have 10 % unemployment for perhaps the next decade. The Jobs bill and the investments made in High speed rail and green technology is what we are going to need to build us up in the future.

[HughMoran]

9. Yep, it would be foolish to give creedence to these fools

We definitely need the jobs bill.

[babylonsister]

8. m$nbc can't be bothered to show newz on weekends, yet they can

afford panels of economists? :crazy: