Progressive Breakfast: Yes, We Need More Stimulus

Each morning, Bill Scher and Terrance Heath serve up what progressives need to affect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.

Rising Chorus Demands Congress Expand Stimulus

Bernanke points finger at Congress, away from Fed. NYT: [1] "... he made it clear that the Fed could not simply conjure up a recovery by manipulating interest rates and the money supply ... [Bernanke] has told Congress that some additional fiscal stimulus could be helpful in supporting the recovery..."

But the Fed needs to step up, says FT's Clive Crook [2]: "... the Fed has already pumped trillions of dollars into the economy by buying debt. If it chose, it could pump in trillions more ... Divided on the point, they have taken a modest further step by preventing the maturing of debt they hold from tightening monetary conditions, as it otherwise would have. They are right to worry about their exit strategy; they are also right to be nervous about being in uncharted terrain. But the balance of risks has moved. They need to go further."

Presidential econ adviser Laura Tyson makes the case for more stimulus in NYT oped: [3] "...by next year, the stimulus will end, and the flip from fiscal support to fiscal contraction could shave one to two percentage points off the growth rate at a time when the unemployment rate is still well above 9 percent. Under these circumstances, the economic case for additional government spending and tax relief is compelling."

Robert Shiller recommends federal revenue sharing with state and local governments to create jobs, in NYT column [4]: "...why don’t we embrace general revenue sharing? Unfortunately, when faced with a need for stimulus, members of Congress seem to prefer to start their own projects, for which they are likely to get more credit from voters. Local governments, meanwhile, which are more likely to know where spending is really needed, remain in deep trouble."

"Record number in government anti-poverty programs" reports USA Today: [5] "[They] now serve a record one in six Americans and are continuing to expand ... More than 40 million people get food stamps, an increase of nearly 50% during the economic downturn ... 'This program has proven to be incredibly responsive and effective,' says Ellin Vollinger of the Food Research and Action Center ... More than 4.4 million people are on welfare, an 18% increase during the recession. The program has grown slower than others, causing Brookings Institution expert Ron Haskins to question its effectiveness in the recession."

WH may try to bring back homebuyer tax credit, but not yet. WSJ: [6] "Housing and Urban Development Secretary Shaun Donovan described July’s home-sales numbers as worse than the Obama administration had anticipated, but said it was too early to talk about reviving a federal tax credit for homebuyers ... Donovan said the administration would be rolling out two tools in the coming weeks to help homeowners: a Federal Housing Administration refinancing effort to help borrowers who are underwater, and an emergency loan program for unemployed borrowers."

Economists Agree: No Time For Cutting

Survey of economists finds "spurring growth" more important than "cutting deficit." Bloomberg: [7] "Seven out of every 10 survey respondents said promoting economic growth should be the policy priority at the federal level, while 29 percent said cutting the deficit should take precedence."

HuffPost's Robert Kuttner writes that Alan Simpson's "dopey comments" not only smear Social Security, but misinform about the economy [8]: "[The White House debt commission] it has lent credibility to the idea that Social Security is somehow a drag on the economy ... The reality, of course, is that if the economy (and Obama's fortunes) are going down the drain, the reason has nothing to do with Social Security's finances in 2037 -- and everything to do with slow growth, high unemployment, and the lingering effects of a damaged banking system right now. Yet the storyline being peddled by the commission, of a dire fiscal crisis, makes it politically more difficult for Obama to take the necessary steps to get a recovery going."

BP Spills Again

BP and Texas state government fail to inform citizens of major toxic spill. NYT: [9] "For 40 days after a piece of equipment critical to the refinery’s operation broke down, a total of 538,000 pounds of toxic chemicals, including the carcinogen benzene, poured out of the [Texas City] refinery ... Neither the state nor the oil company informed neighbors or local officials about the pollutants until two weeks after the release ended, and angry residents of Texas City have signed up in droves to join a $10 billion class-action lawsuit against BP ... scores of Texas City residents said they experienced respiratory problems this spring..."

Truthout's Dahr Jamail and Erika Blumenfeld report that despite the "all clear," Mississippi isn't clear of oil [10]: "The State of Mississippi's Department of Marine Resources (DMR) opened all of its territorial waters to fishing on August 6. ... On August 19, Truthout accompanied two commercial fishermen from Mississippi on a trip into the Mississippi Sound in order to test for the presence of submerged oil. Laboratory test results from samples taken on that trip show extremely high concentrations of oil in the Mississippi Sound."

LA Gov. Bobby Jindal pushes President to end drilling moratorium immediately. The Hill: [11] "The White House is reportedly considering an early end to the ban but Jindal wants to see a 'greater sense of urgency' from the president."

Republican co-chair of WH oil spill commission William Reilly also supports early lifting. The Hill: [12] "He cited the report that the Bipartisan Policy Center provided the panel last week on the moratorium. The think tank’s analysis concluded that Interior has imposed enough safeguards to allow drilling to safely resume."

Reilly also presses Senate to give commission subpoena power [13] reports the Hill.

New debate over use of offsets in existing cap-and-trade systems. NYT: [14] "Many climate experts say encouraging the trade in [greenhouse gas] HFC-23 offsets makes economic and environmental sense. One molecule of HFC-23 that is allowed to vent into the atmosphere has the potential to trap about 12,000 times as much heat as a molecule of CO2 ... [But] CDM Watch ... raised allegations with the United Nations’ climate office that some plants were producing more refrigerant than they needed to meet market demand to cash in on credits for HFC-23 ... the United Nations stopped issuing further offsets from five chemical plants in China while it investigated their practices..."