Sign marking a stimulus project on Route 120 in Waukegan, Ill. AP Photo/Jim Prisching
By Frank James
The idea of a second economic stimulus plan doesn't appear to be gaining traction. If anything, far from it.
Just eight of 51 economists in The Wall Street Journal's latest forecasting survey said more stimulus is necessary, suggesting an average of about $600 billion in additional spending. On average, the economists forecast an unemployment rate of at least 10% through next June, with a decline to 9.5% by December 2010.
"The mother of all jobless recoveries is coming down the pike," said Allen Sinai of Decision Economics. But he doesn't favor more stimulus now, saying "lags in monetary and fiscal policy actions" should be allowed to "work through the system."
Like most respondents, Mr. Sinai said the bulk of the stimulus wouldn't be felt until 2010. When asked how much the stimulus has helped the economy, 53% of respondents said it has provided somewhat of a boost but that the larger effect is still to come.
With the Obama Administration not supporting a stimulus and House Speaker Nancy Pelosi yesterday making it clear that she was also taking a wait-and-see stance on whether the present stimulus will eventually do the trick of re-energizing the economy, it would appear all the talk about about a second stimulus happening anytime soon is just that, talk.