When President-elect Barack Obama officially introduces his economic team today, he is also expected to lay out his vision for a “massive fiscal stimulus program.” While estimates of its size vary — from $300 billion to over $700 billion — the expected stimulus package is now almost certain to eclipse the $175 billion package that Obama proposed during the election. The need for a stimulus increases with each passing day. Last week, new unemployment claims reached a 16-year high and are expected to increase again this week, while the total number of individuals seeking jobless benefits is now at a 25-year high. More worrisome for the nation’s overall economic outlook is the very real threat of deflation. While the current crisis looks to be the greatest economic crisis since the Great Depression, economist Dean Baker explained recently this crisis needn’t be as bad as the Great Depression. Baker wrote bluntly, “There is a simple way to get out of that sort of prolonged downturn: spend money.” Despite such a simple prescription for our economic ills, conservatives who enthusiastically embraced President Bush’s record deficit spending to fund the war in Iraq and tax cuts for the rich, are now recklessly opposing a stimulus package that would include necessary and significant spending to jump-start the economy and fund tax-cuts for the middle class.
From The Progress Report