Just days after admitting that they underestimated how bad the countries economic problems were, the Obama administration is supposedly considering another economic stimulus package. According to Laura Tyson, an advisor to Obama, the last stimulus package was “a bit too small.” She continued to claim that a new stimulus plan would have a “positive effect, but the real economy is a sicker patient.”
According to a new Bloomberg story about the stimulus, Tyson claims that the new package would have a more pronounced impact in the third and fourth quarters.
“Tyson’s comments contrast with remarks made two days ago by Vice President Joe Biden and fellow Obama adviser Austan Goolsbee, who said it was premature to discuss crafting another stimulus because the current measures have yet to fully take effect. The government is facing criticism that the first package was rolled out too slowly and failed to stop unemployment from soaring to the highest in almost 26 years.”
“Obama said last month that a second package isn’t needed yet, though he expects the jobless rate will exceed 10 percent this year. When Obama signed the first stimulus bill in February, his chief economic advisers forecast it would help hold the rate below 8 percent.”
“Unemployment increased to 9.5 percent in June, the highest since August 1983. The world’s largest economy has lost about 6.5 million jobs since December 2007.”
“The economy is worse than we forecast on which the stimulus program was based,” Tyson, who is a member of Obama’s Economic Recovery Advisory board, told the Nomura Equity Forum. “We probably have already 2.5 million more job losses than anticipated.”