Second Stimulus: Laura Tyson, Obama Adviser, Says Economy Needs Boost

bloomberg.com:

July 7 (Bloomberg) -- The U.S. should consider drafting a second stimulus package focusing on infrastructure projects because the $787 billion approved in February was "a bit too small" said Laura Tyson, an adviser to President Barack Obama.

"The current plan will have a positive effect, but the real economy is a sicker patient," Tyson said in a speech in Singapore today. The package will have a more pronounced impact in the third and fourth quarters, she added, stressing that she was speaking for herself and not the administration.

Read the whole story: bloomberg.com

Comments

[olephart]

The Nation is foundering and here is Obama’s economic team:

Larry Summers, former Clinton Treasury Secretary and advisor to Goldman Sachs who supported the repeal of Glass Steagal and the passage of the Commodity Futures Modernization Act deregulating derivatives and speculation.

Timothy Geithner, former head of the New York Fed who oversaw the entire financial meltdown and did nothing.
Robert Hormats, Vice Chairman of Goldman Sachs, is to be installed as Under Secretary of Economics, Business, and Agricultural Affairs.
• Jacob Lew, Chief Financial Officer of Citigroup Alternative Investments Group, as Deputy Secretary of State
(Lew’s dept. lost $509 million in the Q1 2008)
• Michael Froman, Citigroup, Deputy National Security Adviser for International Economic Affairs. Froman was formerly Chief of Staff to Robert Rubin at Treasury, before following him to Citi.
• Froman’s deputy, David Lipton, ran Citi’s global country risk management effort.
• Lewis Alexander, Citigroup’s chief economist and now Counselor to Treasury Secretary Timothy Geithner
• Neal Wolin, President and COO, Hartford Insurance Company, Property and Casualty Group now Deputy Treasury Secretary (Hartford received $3.4 billion in TARP funds).
• Gary Gensler, Goldman Sachs partner, now Chairman of the Commodity Futures Trading Commission Note: It was Gensler who was a key proponent (as Clinton’s Assistant Secretary of Treasury) in pushing the Commodity Futures Modernization Act of 2000.
• Mark Patterson, Goldman Sach’s lobbyist, now Treasury Chief of Staff
• Linda Robertson, Enron lobbyist, Chief PR Federal Reserve

Any questions?

[Changeling]

Do something for the people:

Pay off everyone's student loans. Hundreds, if not thousands a month that med students, lawyers, etc no longer have to pay. Think they won't be pumping all that back immediately into the economy?

[Lorianne]

Yes but it's the same money taken from others to pay off the student loans.
So it's robbing Peter to pay Paul.

Debt doesn't 'go away' (except thru inflation).

[Changeling]

Which is what we're doing now anyway, so lets do something with long-term benefit to the populace as opposed to pumping money into corporate bailouts.

[Adartist777]

Or bankruptcy.

[cjt1957]

Sounds like you have a big student loan you don't want to pay. Man up and pay your debt.

[BigBagel]

Only a small amount of the first stimulus is in circulation so how can it bea failure when it hasn't come to fruition?

[Lorianne]

It was a failure on Day One by putting us all in debt.

[lvdragonlady]

The government needs to wait on the 2nd one. Sometimes it takes awhile for things to straighten out.
It has only been a few months, there should be no decision on this, until the very end of this year at the earliest.
What needs to be done, is to stop all the talking heads from running their mouths when they do NKS.
They are not experts and are making matters worse not better.
Limit short selling and speculation on ALL stocks.
The banks are not lending,fine, take the money back and see how they get on then! let them do it on their own and see how that works for them.
Now that America knows what is going on behind the scenes, we will make adjustments and if they fail, we will survive.

[confidance government]

Using stimulus to insulate ourselves from the shocks of re balancing and economy that is based 70% on consumer spending via stimulus and bailouts will about as effective as trying to drain the Mississippi River with a bucket.. There has been simply too much malinvestment for the past 20+ years for there to be any other result than a major, multi-year recession, regardless of an government policy.

With two wars, troops deployed all over the globe, the banking and auto industries on life support, a wave of retirees that will tax Medicare and Social Security to the breaking point., and unemployed straining the what social services there are, turning to crime when these services are proved inadequate, we will see our countries collapse unless drastic policy changes are implement. If we continue to finance all these obligations without raising taxes, we will destroy the dollar through inflation and it will no longer hold its status as the world's reserve currency, if we raise taxes at the same time when so many business and families are struggling, we will further damage the economy right when it needs time to recover.

End the wars, withdraw globally, and ending corporate socialism. Then we may have a chance of repairing the damage; as it is, we are bankrupting the nation.

[marijam]

My husband just got laid off. My understanding is that only 20% of the stimulus has been released. Release that, then we can think about a second stimulus.

[melissamsouza]

I hope she and other government officials are right that the Stimulus will start picking up and actually having a significant impact in the third and fourth quarters. A lot of expecations were put into this thing--it was Obama's first and most significant legislative victory to date, touted as absolutely necessary to stave off economic collapse. This thing better start working, or even Obama's most ardent supporters are going to begin getting angry.

[grateful4thedead]

it will NOT have an impact in Q3 or Q4.

it should start to have some impact as Q1/Q2 of 2010 rolls around, just in time for a resurrection of "green shoots are back" leading into the mid term elections. c'mon, it's too easy to figure out.

[Bcasey11]

yeah a second stimulus cause the first one was SOOOO successful, CHANGE !!!!!!!!!!­!!!!!!!!!!­!!!!!!!!!!­!!!!!!!!!!­!!!

[TJCole]

Yes the Real Economy which is the General Prosperity, not the Banks or Wall St...!

Real Reform, Real Change..!

[MalakAlHaq]

Hellooooooooo,

Why in the first place didn't you listen to Paul Krugman!

Maybe now you should resign.

[grateful4thedead]

the stimulus that will create jobs and prevent the escalation of our suffocating debt is summed up in three words: corporate tax cuts.

before you flame, look at history and differentiate between corporate and personal income tax reductions.

[power1]

Two of sh*t is sh*t.

[getsit]

As Paul Krugman predicted not enough money. And with state laying off governmental employees, cutting funds to schools and local communities and cutting back on infrastructure projects, etc. means less money into the economy since our local economies depend on middle class income taxes,and regressive taxes like sales taxes.

The next stimulus needs to go to the states specified to SAVE JOBS.

And every dollar cut in food stamps, Medi-Caid, and other support services to the poor also takes that dollar away from being spent in the local economies.

Less money in people's pocket, less money spent to stimulate the economy.

California is sending out IOU warrants instead of checks. Another blow to the economy of California. Calfiornia pays more in revenue to the US government than it gets back, with our tax dollars going to other poorer states who choose not to tax. We appear to be supporting the rest of the country.

[econ1]

A really good question is what our California Representatives and Senators have done to help California. Waxman, Pelosi, Feinstein, Boxer, Eschoo all voted to support Michigan by sending $75 billion, so far, to GM and Chrysler. I haven't seen anything from them on helping California companies.

[hulagirrrl]

The money is in the banks..... do you think that China will back up more loans? The only thing left is to run the printing press even faster...

Should've, Could've, well the avalanche is coming down now.

[dizmo4]

Well duh, THe first set of stimulus money is just now getting spent. Perhaps there will be a need for a stimulus, but there are also only a set number of "shovel ready" projects.

People need to have some patience.

[hulagirrrl]

No, Obama needs to step out and do what he promised to do, Change the system, he is not doing that, he is going with the bad advisers and not keeping his ears on the ground.

[pastpartisan]

We are borrowing the stimulus money. More stimulus is equivlent to throwing gasoline on the fire. We can't possible pay the debt back... legitemately. The government will use inflation to cheapen the debt. Unfortuneatly, this will hurt the poor, the working class, and the elderly on fixed income. Reckless government spending is not a Liberal value. http://www.alexandria.lib.va.us/link/redir.pxe?www.iamned.com

Stimulus is a joke of a concept; it doesn't end up with real economic growth in the long term. Even the New Deal failed to increase private investment. It wasn't until 1941 that domestic private investment reached 1929 levels. The fact that the first stimulus has failed to stop the bleeding yet isn't surprising. Our government deficit for the year which is over 20% of GDP (when the omnibus bill, first stimulus, bailouts, and on-budget deficit are summed) is unsustainable and something's gotta give, whether it be the lenders or the interest rates.

hat tip to http://www.alexandria.lib.va.us/link/redir.pxe?www.iamned.com