“It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work. It is time for Congress to act.”
-- President Barack Obama, this morning
There're two arguments surrounding the stimulus plan currently dragging through Congress. One says if we don't pass a bill quick enough, we'll be on a crash course to another Great Depression. The other says if it's passed too hastily and ends up being a drunken $800-billion (or thereabouts -- the final number is still in flux) spending spree, we'll be on a crash course to the Greater Depression. I'm siding with the latter.
Last night, Senate Majority Leader Harry Reid pleaded for passage without letting another second pass. "If necessary, we're going to work through the night ... I can’t imagine what would happen to financial markets tomorrow if there are reports this bill might go down," Reid said.
Is that what this is down to? We're hellbent on pushing through $800 billion -- 6% of GDP -- because we don't want to have a bad day in the stock market?
Now, I understand the urgency and severity of our economic problems. This morning's report that 598,000 jobs were axed in January -- bringing the unemployment rate to 7.6% -- is proof positive that the economy is in freefall.
Something needs to be done. I just worry that focusing on time rather than quality is a dire mistake. President Obama mentioned this morning that the current version, "is not perfect, but a bill is absolutely necessary.” True, but if we're talking about $800 billion, we deserve as close to perfect as possible.
It was a different story when the $700 billion TARP bill was passed this past fall. After the collapse of Lehman Brothers, the sale of Merrill Lynch to Bank of America (NYSE: BAC ) , and the near bankruptcy of AIG (NYSE: AIG ) , there was a literal run on the banks that threatened the collapses of Goldman Sachs (NYSE: GS ) , Morgan Stanley (NYSE: MS ) , and just about every other bank. Counterparties were yanking credit lines. Panic was calling the shots. Back then, the sense of minute-by-minute urgency was real. As Ben Bernanke said, "If we don't do this, we may not have an economy on Monday."
The urgency of an economic stimulus today isn't nearly as up-to-the minute. Again, I'm not trying to belittle its importance, but if it takes Congress an extra few days to hammer out a bill that will actually work in lieu of one that'll leave us with little stimulus and $800 billion of debt, by all means, take your time. Whether the bill will actually be effective is up for debate; the debt it'll burden us with isn't.
What's your take on it all? Should we rush something through ASAP, or really focus on a quality bill, even if that means a few days of debate? Take a second to weigh in via the Fool poll below. If you care to elaborate, leave your thoughts in the comment section as well.
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Is Obama crying wolf with this stimulus package?