Just when you thought the economy had hit rock bottom. The Conference Board, a non-profit global business organization has reported that its consumer confidence index has dropped to its lowest point since the last recession in 1992. The New York Times paints the grim picture:
Tuesday’s data suggested a nation struggling with expensive gas and devalued homes, where people are fearful for their jobs and wary about where the economy is headed.
Any positive signs that economists and forecasters may have cited need to be thrown out the window. Even with the consumer confidence index at 50.4%, down a whopping 7.7% from May, the worst may still be yet to come. This report should be a wake up call to legislators across the country on behalf of a nation in desperate need of more help.
As the economy worsens, more and more key players are getting on board with the idea of a second economic recovery package. But not everyone’s where we need them to be to get something done in time to matter. For example Rep. David Obey (D-WI), powerful chairman of the Appropriations Committee free associated to Congress Daily (subscription only) and revealed that he doesn’t quite get how urgent doing something to stave off this recession is:
“People use all kinds of terminology; I don’t care if you call it a second supplemental or a second economic [stimulus] package — to me there are all kinds of things that we need domestically — but we need finish this job [war supplemental] before we can start thinking about the next one”
This pains me. Not only are House Democrats punting on telecom immunity, they’re putting war spending ahead of domestic spending.
As I wrote on myDD, Bush’s first economic stimulus package just didn’t work. We didn’t get the big sweeping surge of economic growth we were promised. Even what good news we’ve gotten was drowned out by a chorus of story after story of bad economic news. The costs of living are growing rapidly as employment becomes harder to find. Food is getting more expensive as food bank lines grow longer. The longer Congress waits to act, the worse things will get.
And the states can’t wait for the aid that Democratic leaders say must be included in a second stimulus package either. State spending is the last prop holding up the economy and is at a tipping point. More than half of the states are facing crippling budget shortfalls that total $48 billion for the upcoming fiscal year. In the absence of aid from the federal government, states have been forced to cut vital services for many of our most vulnerable citiznes. The Center on Budget and Policy Prioritiesgives outlines the chopping block:
At least 12 states have implemented or are considering cuts that will affect low-income children’s or families’ eligibility for health insurance or reduce their access to health care services.
At least 10 states are cutting or proposing to cut K-12 education; three of them are proposing cuts that would affect access to child care.
At least 11 states have proposed or implemented reductions their state workforce. Workforce reductions often result in reduced access to services residents need.
And when states are forced to do things like cut their state workforce, the economy suffers even more. According to CNN/Money:
With falling revenue from sales and income taxes, and property-tax declines looming, states, cities and towns have already laid off tens of thousands of government employees. Many expect more job cuts ahead as public officials struggle to balance their budgets.
Economists say that cutbacks in jobs and spending by local governments could be a major drag on the overall economy.
It’s cool that Obey recognizes the need for a second stimulus package. But he also needs to understand that each day he lets pass without doing something means the economic hole we’re in is that much deeper and is going to require that much more federal spending to help us get out of.