There is a growing body of opinion that $825 billion plus the $350 billion left in TARP funds will not be enough to pull the economy out of what has become a flat spin. There is early evidence that jobs losses may be moving toward one million a month.
A new analysis from the Congressional Budget Office says that the pot is light.
According to Reuters, "The $816 billion package will pour some $525.5 billion, or 64 percent, via spending and tax cuts into the ailing economy within 19 months, according to the report issued late on Monday by the non-partisan Congressional Budget Office."
In other words, the total commitment may be too little and it may hit the failing economy too late.
Since the evidence that more money is needed is piling up and the trends which show that that recession is moving toward a depression get more telling every day, where does that leave Congress? Probably on the wrong side of history, although that judgment is years away.
One of the most salient parts of the rhetoric surround the stimulus legislation is that the money needs to get into the system fast and that, if anything, the government needs to spend more than is necessary to make certain that the cure takes.
What the CBO analysts points to is that the total value of the spending bill needs to move up by hundreds of millions of dollars and perhaps more or the programs need to be reset to work more quickly. That would mean the bill has to be torn up and recast, which takes time.
The other alternative may be the more likely one. At midyear, Congress will have to pass a new bill and dump more money into the system.
Douglas A. McIntyre
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