Apologies for cross-posting.
Economists' Letter in Support of New Stimulus Package
Economists are invited to sign on to the letter below [sign on at
http://salsa.democracyinaction.org/o/967/petition.jsp?petition_KEY=1731]
to urge Congress to move quickly and decisively to pass an effective new
economic stimulus package.
Please circulate this letter among your colleagues. The closing date
is Friday, November 14th.
__________________________________________________________
We, the undersigned economists, urge Congress to pass a new stimulus
package as quickly as possible. The need to deal with financial turmoil
has directed attention away from the “real” economy. But the latest
data clearly show that the economy is entering a serious recession,
initiated by the collapse of homebuilding and intensified by the
paralysis of credit markets. Without a fast an effective response by
government, the economy could continue to spiral downward, leading to a
large increase in unemployment and a sharp decline in GDP.
The potential severity of the downturn suggests that a boost to demand
on the order of 2.0-3.0 percent of GDP ($300-$400 billion) would be
appropriate, with the goal being to get this money spent quickly. The
list of targets includes:
a) aid to state and local governments that are being forced to make
emergency cutbacks as revenues fall;
b) extending unemployment insurance and increasing other benefits
targeted toward low and moderate income households who are likely to
spend quickly;
c) moving forward infrastructure projects that have already been
planned and scheduled; and
d) providing tax credits and other support for “green” projects that
can be done quickly, such as retrofitting homes and businesses for
increased energy efficiency.
The sharp falloff in demand resulting from the collapse of the housing
bubble and the destruction of financial wealth means that there is
little reason to fear that enlarged deficits will raise interest rates
and deter private investment. It is far more likely that an effective
stimulus package will promote investment by improving prospects for
higher sales and profits.
With little downside risk and much potential gain, it is important that
Congress move quickly and decisively. Delay can only deepen and prolong
the recession.
Sincerely,
Joseph E. Stiglitz, Nobel Laureate, Columbia University
Robert M. Solow, Nobel Laureate, Massachusetts Institute of Technology
Eileen Appelbaum, Director of the Center for Women and Work, Rutgers
University
Sign on at:
http://salsa.democracyinaction.org/o/967/petition.jsp?petition_KEY=1731
--
Nicole Woo
Director of Domestic Policy
Center for Economic and Policy Research (CEPR)
1611 Connecticut Avenue NW, Suite 400
Washington, DC 20009
Tel: 202.293.5380 x108
Fax: 202.588.1356
E-mail: [EMAIL PROTECTED]
Website: www.cepr.net
--
Nicole Woo
Director of Domestic Policy
Center for Economic and Policy Research (CEPR)
1611 Connecticut Avenue NW, Suite 400
Washington, DC 20009
Tel: 202.293.5380 x108
Fax: 202.588.1356
E-mail: [EMAIL PROTECTED]
Website: www.cepr.net
_______________________________________________
pen-l mailing list
[email protected]
https://lists.csuchico.edu/mailman/listinfo/pen-l
