Right Voices

It looks like that interest rate cut was just what the economy neededThe slowing U.S. economy is unlikely to sink into an election-year recession and an economic rebound could begin as early as next year as housing and financial market turmoil fades, the Congressional Budget Office forecast on Wednesday.

But that forecast by Congress’ nonpartisan budget analyst does not include the cost of an economic stimulus measure that is quickly moving through Congress and could cost around $150 billion or more. The deficit projection for fiscal 2008, which ends September 30, also does not include more money Congress is likely to approve this year for the war in Iraq.

While CBO noted an elevated risk of recession, its outlook was weighted more toward the United States working through its current economic problems and escaping a full-blown recession.

“Although recent data suggest that the probability of a recession in 2008 has increased, CBO does not expect the slowdown in economic growth to be large enough to register as a recession,” CBO said.

“CBO expects the economy to rebound after 2008, as the negative effects of the turmoil in the housing and financial markets fade,” the semi-annual budget and economic report said.

Ed:

Now one has to ask whether the $145 billion stimulus package will do more damage than it repairs. It will push the deficit higher and only give a short-term boost to an economy unlikely to slide backwards. It appears to address political concerns rather than economic need, and the only beneficiaries in the long run will be the politicians who buy a momentary uptick in their approval ratings.

Don:

No recession, OK?

So why the hell are we bothering with a $145 billion stimulus package?

Especially when the deficit is expected to rise.

I liked it better when Congress did absolutely nothing.

H/T to Memeorandum