This makes perfect sense. The first stimulus didn’t work so the obvious solution is to borrow more money to pay for a second stimulus package.
From Bloomberg.com
July 7 (Bloomberg) — The U.S. should consider drafting a second stimulus package focusing on infrastructure projects because the $787 billion approved in February was “a bit too small,” said Laura Tyson, an outside adviser to President Barack Obama.
The current plan “will have a positive effect, but the real economy is a sicker patient,” Tyson said in a speech in Singapore today. The package will have a more pronounced impact in the third and fourth quarters, she added, stressing that she was speaking for herself and not the administration.
…
“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.”
The economy is worse than forecast? For the past 8 years, even when the stock market was setting new records and unemployment was bouncing around all-time lows, the Democrats and the media kept telling us we were on the brink of a full-blown Depression. If they based their estimates on a Depression-era economy, then how did they underestimate how bad things were?
This is a good opportunity to see just how wrong Obama was on the stimulus package by showing the famous graph from Innocent Bystanders:
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