Economic Realism

The recent glum economic news points up the problems the Dems have going into the fall elections. While their actions in passing the 2009 stimulus were sufficient to stop what would have been a depression, it hasn't been sufficient to provide dramatic improvement in the economy. Of course, the Rethugs couldn't be happier with poor economic news; while most voters lay the blame for the bad economy on previous Rethug policies, most voters will also hold the Dems responsible for a continued weak economy.

Talking Points Memo has a brief blog on where we go from here. The Dems are too nervous to do much of anything; the Rethugs are sitting on their hands, as they have been for the past 18 months. That leaves the Federal Reserve, which has control over monetary policy. Since inflation is not a worry, the Fed could begin to loosen the money supply, and encourage more credit and lending to businesses. We'll see, but as we've noted before, the Dems missed an opportunity when they let Rethugs water down and reduce the original stimulus. Now it's out of their hands.