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**Axxflcaj** · 08-14-2010, 08:43 AM

No one seems to know what to do about the economy. Not spending isn't going to help and spending doesn't seem to be helping.

The reality is that stimulus money and extended unemployment assistance are helping, but as many economists noted early on, the stimulus was about half as large as it needed to be. But there's no way that a larger package could pass the Senate while the Franken recounts were still going back and forth, so Democratic leaders settled for something that could lure Republican votes to avoid filibuster.

Still, it's been estimated that the stimulus kept our unemployment rate from soaring much closer to 20%, and that's a laudable accomplishment.

When money flows toward the middle class and poor, it finds its way into the economy very quickly as opposed to money pushed into wealthier households, who don't need it as quickly and just put it into savings. When dollars move into restaurants and gas stations and stores and babysitters and dry cleaners and such, small business owners can afford to keep people on staff. That's the bigger goal of many stimulus efforts, to keep money flowing to businesses that would be in real trouble if any less customers came through the door.

It will probably be another six months before we start to see the unemployment rate drop with any real momentum. Nothing will convince businesses to start hiring overnight. They need to see more people coming through the door month after month to flip that switch, and they won't see that until those people feel like their own job situations are stable, which again is a big, interconnected circle that all starts with middle class spending.

08-14-2010, 08:43 AM	#7
Axxflcaj Join Date Oct 2005 Posts 428 Senior Member	No one seems to know what to do about the economy. Not spending isn't going to help and spending doesn't seem to be helping. The reality is that stimulus money and extended unemployment assistance are helping, but as many economists noted early on, the stimulus was about half as large as it needed to be. But there's no way that a larger package could pass the Senate while the Franken recounts were still going back and forth, so Democratic leaders settled for something that could lure Republican votes to avoid filibuster. Still, it's been estimated that the stimulus kept our unemployment rate from soaring much closer to 20%, and that's a laudable accomplishment. When money flows toward the middle class and poor, it finds its way into the economy very quickly as opposed to money pushed into wealthier households, who don't need it as quickly and just put it into savings. When dollars move into restaurants and gas stations and stores and babysitters and dry cleaners and such, small business owners can afford to keep people on staff. That's the bigger goal of many stimulus efforts, to keep money flowing to businesses that would be in real trouble if any less customers came through the door. It will probably be another six months before we start to see the unemployment rate drop with any real momentum. Nothing will convince businesses to start hiring overnight. They need to see more people coming through the door month after month to flip that switch, and they won't see that until those people feel like their own job situations are stable, which again is a big, interconnected circle that all starts with middle class spending.
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