Better Late Than Never

Summary

In this article the author , Jared Bernstien , advocates the importance of the economic stimulus and its necessity , regardless of the time it takes to release the package . He addresses concerns in the press about the delay in the release of the package as people have said that the stimulus will only fulfill its purpose if it is released very soon since recessions have a time limit which is up for expiry soon . The author however disagrees with this statement as it narrows the scope of the package , restricting it to just

act as a means to 'mitigate the fall in overall growth ' or decline in GDP

In actuality , Bernstein believes that then anti-recession package should also be focused on factors which matter most to people and directly affect them , such as low rates of job growth , unemployment on the rise and the consequent wage and income losses for a large number of families , even those who remain employed . The decline in GDP comes and goes , and the recession is often dated in accordance with this indicator , but the resulting problems in the job market last for much longer . Hence , while the recession "officially " lasts for about a year its ramifications on employment growth take longer to recover from , and to prove this the author quotes examples from the recessions of 1990-91 which officially ended in March 1991 but the fifteen months that followed saw significant increases in unemployment , and the 2001 recession , when about 3 million jobs were lost between the official end-date of the recession and August 2003

Therefore , the point the author is trying to make is that paychecks matter more to families than stock portfolios , and the slack job market led to decline in real median family incomes in the recessions as well as the recovery periods that ensued . So , while not undermining the importance of GDP growth , if the stimulus package can effectively target other important factors as well , such as the employment market , it would still be highly welcome and definitely not redundant or unnecessary . The author concludes by saying that only time will tell if this "type of GDP up , jobs /incomes-down dynamic " from previous recessions will occur in the current recessionary phase . However , that being said , while some forecasters are categorizing this recession as a 'mild ' one , the author 's calculations , derived from past relationships between unemployment and middle-class incomes , show that the forecasted unemployment rate for 2009 of 6 .5 would cause a drop in real incomes of such families of 2 ,400 over the time span of 2008 and 2009 . In such a scenario , any tool which provides some relief from the impact of recession is welcome , even if it arrives a little later than the most desired time...