President Barack Obama's stimulus bill was passed fewer than five months ago. Only a small fraction of the money has been spent, but Republicans already know it's a failure.

"The trillion-dollar stimulus passed in February has not produced the jobs that were promised," Florida Rep. Vern Buchanan said in a news release.

"I am convinced that it won't work," California Rep. Darrell Issa said on Capitol Hill.

"A second stimulus is an even worse idea than the first stimulus, which has been demonstrably proven to have failed," Senate Minority Leader Mitch McConnell told reporters.

Republicans, of all people, are supposed to know instant gratification isn't always possible. Be patient, guys. Save yourselves for marriage.

More puzzling are similar sounds from Democrats, who in talking about a second stimulus package seem as if they're writing off the one they already passed like a Citigroup subprime mortgage.

"We need to be open to whether or not we need additional action," House Majority Leader Steny Hoyer said on Capitol Hill.

The country "should be planning on a contingency basis for a second round of stimulus," Obama economic adviser Laura Tyson told a conference in Singapore.

Don't pay much attention. Republicans just want to rile the base by damning helpful measures passed by their opponents.

Democrats are setting up excuses for next year's elections, when no matter what happens, the economy won't be making us all rich. It's not our fault, they'll say. The Republicans blocked a new stimulus.

But give the old stimulus a chance.

People keep grumping to me about Obama's "socialism" and then, in practically the same sentence, criticizing the paltry extra in their paycheck that the stimulus made possible.

"Thirty dollars a month. What a joke," they'll say, conjuring the old story of the Catskills resort customer who complains about the terrible food as well as the small portions.

Presumably for, say, $500 a month, socialism would be OK.

Nothing government does to the economy happens immediately.

When the Federal Reserve cuts or raises interest rates, it takes about 18 months to make a difference, economists estimate. Tax cuts or tax increases aren't fully felt for years.

The Obama stimulus isn't even out the door.

Only about $100 billion of the $787 billion package has been spent. As pointed out in yesterday's Wall Street Journal by Edward Lazear, who was head of the Council of Economic Advisers under President George W. Bush, much of that money was transferred to state agencies, which are still sitting on it.

But it will all get spent, much of it this year. It'll finance highway construction and fixing water systems and improving homes for soldiers. It'll weatherize government buildings, saving taxpayers on energy costs. It'll improve telecom connections, flood control, the electricity grid and the computers at the Social Security Administration in Woodlawn.

All this will create jobs. Most of the package is direct spending, approved on the not unreasonable notion that it will prompt hiring and buying whereas a tax cut of equal size would likely have been stashed in the bank. But Republicans conveniently forget that the deal includes $288 billion in individual and corporate tax cuts.

The fiscal stimulus is only part of the government's response. Other injections haven't been fully deployed, either. The Federal Reserve's and Treasury Department's Public-Private Investment Program, which has the potential to take billions in dubious mortgage assets off Wall Street books, hasn't spent a dime yet. The government isn't anywhere near done issuing credit to grease consumer lending or helping marginally troubled homeowners stay in their houses.

Did the Democrats tell a whopper about how bad the economy might get or how much the stimulus would help? Yes. It's very reminiscent of the fabulous job growth that Bush said would result from his 2003 tax cuts. Didn't happen.

Last week's miserable employment report was the main cause of the stimulus failure talk. The nation shed 467,000 jobs in June, according to preliminary estimates, far more than economists predicted. Unemployment rose to 9.5 percent.

Even so, job losses were worse in every other month this year but one. New claims for unemployment benefits peaked months ago. Factory orders for May rose the third time in four months. Consumer confidence has been rising.

The worst economy in 80 years won't heal in a few months. Republicans need to stop complaining about the medicine when most of it hasn't even been swallowed.

And Democrats ought to stop mixing up another dose. (Senate Majority Leader Harry Reid gets it: "There's no showing to me that a second stimulus is needed," he said, according to USA Today.) They've got enough work to do dispensing the one they already prescribed.

Source

U.S. President Barack Obama's administration is not discussing a second stimulus plan to jolt the U.S. economy out of recession, a White House budget official told Congress on Wednesday.

"No one in the administration is talking about a second stimulus at this point," said Robert Nabors, deputy director of the Office of Management and Budget, who is tracking the effects of the economic recovery plan already in effect.

But the White House press secretary, speaking to reporters aboard Air Force One, suggested that could change if the country continues to lose jobs.

Nabors testified at a House of Representatives hearing on oversight of the $787 billion stimulus plan.

"What we are focused on right now is implementing the recovery act that Congress has already passed," he added.

Press Secretary Robert Gibbs said Obama is "not ruling anything out, but at the same time he's not ruling anything in" on another stimulus.

"We continue to watch what's going on," Gibbs said. "I think the bottom line for the president is, if there are steps that he thinks, and his team thinks, need to be taken to improve our economy, we won't hesitate to do that.

Obama is meeting this week with leaders of the Group of Eight major industrial nations in L'Aquila, Italy, to discuss solutions for the languishing world economy.

World markets, which had been recovering since March, have recently lost ground, in part because comments by an Obama economic adviser were seen as signaling a U.S. recovery was farther off than hoped. The Dow average fell 1 percent on Wednesday but later pared some of its losses to 8,120.

Laura D'Andrea Tyson, an economist who advised Obama during the 2008 campaign and is a member of his economic advisory panel, said on Tuesday that the United States should be planning for a possible second round of fiscal stimulus that focused on infrastructure investment.

Nabors told the hearing Tyson did not represent the White House.

"She's an outside economic adviser. She does not work for the administration," Nabors said.

When he signed the American Recovery and Reinvestment Act into law in February, Obama hailed it as key to creating and saving jobs during the longest U.S. recession since the Great Depression of the 1930s. But with the unemployment rate now standing at 9.5 percent, its highest in more than two decades, some are wondering if the various tax and spending measures can accomplish that mission.

House Majority Leader Steny Hoyer said on Tuesday that U.S. leaders should be open to a second stimulus, but Senate Majority Leader Harry Reid, also a Democrat, has said he sees no evidence another recovery package is needed.

Nabors said the country's losing 467,000 jobs in June was "unacceptable," but he noted that the rate of loss was much slower than during the first quarter of the fiscal year when the average monthly job loss was 691,000 jobs.

He said other indicators, such as orders for durable goods, were turning upward, showing the stimulus was having a positive impact and in the near future the country would see "genuine economic expansion and crucial job creation."

Pres. Barack Obama makes comments about economy during a meeting with Vermont Gov. Jim Douglas at the White House, 02 Feb 2009

U.S. President Barack Obama said he expects more banks to fail before the troubled U.S. financial system stabilizes.

In a television interview with NBC-TV broadcast Monday, Mr. Obama said it is likely that banks have not acknowledged all the losses they will experience. He said some banks, in his words, "won't make it."

The president also said he has asked Treasury Secretary Timothy Geithner to set clear guidelines for financial institutions that receive assistance from the federal government. Last week, Mr. Obama criticized companies that paid big bonuses to their executives while they were asking for federal aid.

The president also is continuing to urge lawmakers to pass an economic stimulus bill designed to create jobs. The Senate Monday begins debate on the measure, which calls for about $820 billion in new spending and tax cuts.

A version of the bill was approved in the House of Representatives last week, without a single Republican voting for it.

Republicans also have warned that they will not vote for the Senate version unless it is revised to include more tax cuts and changes to how the money is spent.

The U.S. economy - the world's biggest - is in a recession. The country lost 2.6 million jobs last year and already has seen tens of thousands more layoffs this year.

Source

President Barack Obama talks to reporters in the Oval Office, 02 Feb 2009

President Barack Obama says he will be held accountable for turning around the nation's ailing economy, and making sure that federal funds used to rescue financial institutions and spur growth are well spent.

Less than two weeks in office, President Obama inherited a deepening recession that began more than a year ago. But if blame for the current economic pain and dislocation cannot be pinned on him, the president says he is fully aware that responsibility for reviving the economy falls on his shoulders.

Mr. Obama spoke in a pre-recorded interview that aired on the NBC television network.

"I will be held accountable. I have got four years [first term in office]," the president said. "I think a year from now people are going to see that we are starting to make some progress, but there is still going to be some pain out there. If I do not have this [economic recovery] done in three years, then there is going to be a one-term proposition [will not be re-elected]."

The president is pushing an $800 billion package of tax cuts and new government spending to stimulate an economy that contracted at a 3.8 percent annual rate in the final three months of 2008. The bill is before the U.S. Senate, after being approved by the House of Representatives on a party-line vote last week.

Republicans blast stimulus package

Republicans have blasted the measure, saying it is laden with wasteful spending that will increase the deficit without spurring growth. Democrats say the bill will boost the economy immediately and make investments in energy and infrastructure that will promote long-term economic expansion.

Mr. Obama says U.S. banks and other financial institutions continue to be at risk of failure, despite receiving hundreds of billions of dollars in federal bailout money in recent months. The president says additional funds will be required to prop up those institutions, as well as regulations to ensure the money is not wasted and there is no repeat of the debacle. read more