ABC News' George Stephanopoulos suggests in a blog post Monday that a second stimulus bill might be necessary, and indeed, there's plenty of evidence to back him up. On Sunday, the World Bank predicted that the global economy would shrink this year for the first time since World War II. This morning, Warren Buffett (whose economic acumen Obama often relies on) said the economy had "fallen off a cliff."
And in his New York Times column Monday, Paul Krugman wrote "sooner or later the administration will realize that more must be done." He also points to a recent Newsweek poll showing that a plurality of voters believe that additional stimulus spending will be necessary. But he added that Congress could stymie further spending.
So here's the picture that scares me: It's September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it's still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.
But he can't get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.
Perhaps just as importantly, a plurality of the American people (40 percent) believe more spending is needed to turn the economy around, according to a Newsweek poll released late last week.
When asked about a second stimulus on "This Week" Sunday, Sens. Claire McCaskill (D-MO) and Evan Bayh (D-IN) both demurred, saying that the economy needed more time before the effects of the first recovery package could be judged. Administration officials told Stephanopoulos the same:
"[O]fficials tell me that it's just too early to push for another stimulus, pointing out that only about $3-billion of the first one has gone out the door so far. (The pace is expected to pick up in the next couple of weeks)." But, he adds, "Officials are analyzing the question of what kind of stimulus might be necessary and what form it would take." He says a decision could come as early as the first week of April, when Obama attends the G-20 summit in London.