Cuts in Stimulus Bill Will Cost 500,000 Jobs

This is why I love Dean Baker:

Let’s extend our congratulations to Senators Susan Collins and Ben Nelson for having negotiated a stimulus package that will produce 500,000 fewer jobs than the one passed by the House. Who knows, if the House had its way, the unemployment rate might never cross 10 percent.

There seems to be a real problem with how the folks in the Senate think about stimulus. We have an economy in free fall right now. The data show us losing almost 600,000 jobs in January and the true picture may be even worse.

To counteract this downturn, the federal government has to create demand by spending money, lots of it. The amount of money that we want to spend is a function of the weakness of the economy, which seems to deteriorate by the day.

Trying to save money on stimulus is like finding a short cut for your jogging route. We can do it, but it undermines the whole point of the effort.

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