Senate Democrats

Updated: We Must Act Now to Save the Economy

America’s economy is in a state of emergency and requires swift action – including an economic recovery plan that creates jobs, invests in America and puts the middle class first.  America’s unemployment rate is 7.2 percent, the highest since 1993.  More Americans are out of work today than at any point in the last quarter-century.  In 2008, America lost 2.6 million jobs, the most since 1945. And on Monday, companies announced that 75,000 more Americans would soon lose their jobs.  The time to act is now.

OUR NATION’S ECONOMY IS IN A STATE OF EMERGENCY

The National Bureau of Economic Research has determined that the U.S. economy has been in recession since December 2007. [CNN, 12/1/08]

In the fourth quarter of 2008, America’s GDP declined 3.8 percent annually, the steepest drop since 1982. [Los Angeles Times, 1/31/09]

The unemployment rate rose to 7.2percent in December. [Bureau of Labor Statistics, 1/9/09]

Since the start of the recession, in December 2007, the number of unemployed persons has grown by 3.6million and the unemployment rate has risen by 2.3 percent. [Bureau of Labor Statistics, 1/9/09]

In 2008, the United States lost 2.6million jobs, the most since 1945. [AP, 1/9/09]

In 2008, the United States lost 791,000 manufacturing jobs. [Bureau of Labor Statistics, 1/9/09]

Consumer confidence fell to at an all-time low in December. [MarketWatch, 12/30/08]

In December, new home sales fell to their lowest level on record, dropping to an annual pace of 331,000. [Bloomberg, 1/29/09]

According to the S&P/Case-Shiller 20-city price index, home prices have fallen by a quarter on average since mid-2006. [Bloomberg, 1/29/09]

Consumer spending fell 1 percent in December and rose just 3.6 percent for 2008 – the lowest level since 1961. [Bloomberg, 2/2/09]

The Dow Jones industrial average lost 34 percent of its value in 2008. [Washington Post, 1/1/09]

At least 46 states are facing budget shortfalls of an estimated total of $350 billion through 2011. [CBPP, 1/29/09]

The American Society of Civil Engineers gave our nation a D on the condition of America’s infrastructure, including roads, bridges and dam. [CNN, 1/28/09]

The American Society of Civil Engineers estimates the U.S. will need to spend $2.2 trillion over five years to upgrade our nation’s aging infrastructure. [CNN, 1/28/09]

DELAYING THE ECONOMIC RECOVERY PACKAGE WILL HAVE DIRE CONSEQUENCES FOR AMERICAN FAMILIES

With Each Day of Delay, 9,091 More Americans Could Become Unemployed. According to the Bureau of Labor Statistics, the number of unemployed persons has increased by 3.6 million since the beginning of the recession in December 2007, an average of 9,091 per day. [Bureau of Labor Statistics, 1/9/09

With Each Day of Delay, Another 7,123 American Jobs Could Be Lost. According to the Bureau of Labor Statistics, 2.6 million American jobs were lost in 2008, an average of 7,123 per day. [Bureau of Labor Statistics, 1/9/09

With Each Day of Delay, Another 2,167 American Manufacturing Jobs Could Be Lost. According to the Bureau of Labor Statistics, 791,000 American manufacturing jobs were lost in 2008, an average of 7,123 per day. [Bureau of Labor Statistics, 1/9/09]

With Each Day of Delay, Another 8,636 Homeowners Could Receive Foreclosure Notices. In November, the latest data available, 259,085 homes received at least one foreclosure-related notice, an average of 8,636 per day. [RealtyTrac, 12/11/08]

With Each Day of Delay, 4,964 More Americans Could File for Bankruptcy. According to the American Bankruptcy Institute, overall consumer bankruptcy filings rose to 1.06 million in 2008, compared with 801,840 during 2007, an increase averaging 4,964 per day. [CNN Money, 1/6/09]

With Each Day of Delay, 10,684 More Americans Could Seek Food Assistance (SNAP). According to the Food Research and Action Center, 3.9 million more people were enrolled in the federal food assistance program in October 2008 than in October 2007 due to the recession, an average of 10,684 more per day. [Reuters, 1/7/09]

With Each Day of Delay, 7,777 More Children Could Lose Health Care Coverage. According to the Kaiser Family Foundation, an increase of 1 percentage point in the national unemployment rate will result in 700,000 kids losing their private health coverage. According to the Bureau of Labor Statistics, the unemployment rate increased from 6.2 percent in September to 7.2 percent in December. Under this model, 700,000 children lost their private insurance, an average of 7,777 per day. [Kaiser Family Foundation, 1/9/09; Bureau of Labor Statistics, Historical Data]

ECONOMISTS WARN THAT THE RECESSION WILL BE MUCH WORSE WITHOUT A RECOVERY PLAN

Nobel Prize Winner Paul Krugman Warned that Unemployment Could Reach 10 Percent Without a “Very Effective” Economic Recovery Package. According to Nobel prize winner Paul Krugman, U.S. unemployment could reach 10 percent without a “very effective” recovery package. [AP, 12/8/08]

Moody’s Economy.com Economist Mark Zandi Said that Without a Recovery Plan, the Economy Is Headed for the Worst Downturn Since the Great Depression. Moody’s Economy.com Chief Economist Mark Zandi said, “Without a fiscal stimulus, the economy appears headed toward the worst downturn since the Great Depression… This cycle can be mitigated only by aggressive and consistent government action.” [Zandi Testimony Before the Senate Banking Committee, 11/19/08]

Zandi Said Delaying Passage of an Economic Recovery Plan Would Be a Serious Problem. Asked at the House Steering and Policy forum if it would be a problem if Congress did not pass an economic stimulus for two and a half months, Zandi replied, “Well, I think that would be a serious problem.  The economy is losing a half a million jobs a month and I see no reason why that’s going to stop anytime soon.  I work with a lot of different businesses as an economic consultant and across a wide array of industries businesses are effectively shut down and there is no other response except for a response from you, from government.  If government doesn’t act quickly I think the problems will intensify.” [House Appropriations Committee Press Release, 1/7/09]

Former Labor Secretary Robert Reich Warned that Waiting to Pass an Economic Recovery Package Would Cause Very Real Problems for the Economy and Average Workers. In testimony before the House Steering and Policy forum, former Labor Secretary Robert Reich commented on calls to delay passage of an economic recovery package. He said, “Waiting until March will cause, in my view, real problems for the economy and for average workers.” [House Appropriations Committee Press Release, 1/7/08]

Harvard Economics Professor Martin Feldstein Said Recovery Package Is the Only Way to Prevent a Deepening Recession. Harvard economics professor Martin Feldstein wrote in an op-ed, “The only way to prevent a deepening recession will be a temporary program of increased government spending.” [Washington Post, Feldstein Op-Ed, 10/29/08]

Economic Forecasters Agree Recession Will Last Much Longer Without an Economic Recovery Package. A survey of economic forecasters, conducted by Blue Chip Economic Indicators, concluded that without a federal recovery program the recession could continue most of the way through 2009. [NY Times, 1/3/09]

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