Is it time for the Even More Adverse Scenario to be developed? The Treasury needs to think how much capital the banks will need with 9.4% unemployment. I was forecasting 10% by October but I definitely have to rethink that.
Not that I'm necessarily the boy looking for the pony in the pile of horse dung, but this number is significantly less than many were expecting. Mish, for example, was calling for 600K for at least the next four months.
It's bad, but not worst case. And the futures reflect this.
My brother and sister-in-law have been out of work now for 4 months after being laid off. They've both been pounding the pavement and keyboard to no avail in search of new jobs...
Rocky I started closing puts today anyway. Futures are up 1.5%. Time to accept we will rally on ANYTHING
Is that a sign of bear capitulation?
I have a large DXD position that I have used to hedge my long positions. It's been sickening to watch the past 3 weeks, but I am net positive 3% the last month nonetheless. The market is insane. I can only hang onto my short, because it isn't net costing me anything - but when the bubble bursts, I suspect it will be hard and fast cliff diving.
Birth/death model added 220k jobs (345+220 = 575k excluding fudging)
Duration of unemployment is 4 std dev above 25 year norm - that isn't good.
Lost my energy (oil sands, drillers) and gold longs into the trendline break the other day. Left with really nothing but treasury short, index short and some puts on a REIT.
It's interesting that, in each of the past few months, the unemployment rate has increased by half a full percentage point, in conjunction with the loss of 500+K jobs. This month the UE still gains half a point, but "only" loses 345K jobs. Anyone know what the B/D adjustment is for the month?
Jim Rogers said: ""I’m afraid they're printing so much money that stocks could go to 20,000 or 30,000. Of course it would be in worthless money, but it could happen and you could lose a lot of money being short."
"Birth/death model added 220k jobs: I guess a lot of Chrysler workers suddenly opened up new businesses. Who knew they were such go-getters."
At this point, it would not surprise me to find out that the "birth/death model" jobs number taken unemployment as an input is roughly inverse linear to it.
Happy days are here again at 9.4%.....Dow 36,000. I think Kernan sprayed his shorts on CNBC at 8:31 AM. The green shoots (and leaves) whoredom will be on fully display today. 9.4 %...pwehhh...I thought the employment market was bad or something.
So, if 9.4% was the "more adverse scenario" for end of 2009 and we are there after five months - when does this finally start to negatively impact the banks?
There's plenty of jobs available if you don't mind earning $7.50 an hour. You know the job situation is bad when financial sites are crowing because WALMART is hiring.
Novanglus - the banks are making money off the unemployment system too. There was an article about some state congress people speechifying about how JPM is managing the benefits via a card and the fees they can charge if you aren't on the ball.
Something stinks.
How can we lose 345k non farm Jobs and the number of unemployed rose by 787k?
Is it that there were more farm job losses than non farm losses?
Was it that no one would hire college graduates and they went straight to unemployed. I thought to be unemployed, you actually had to be employed at some point.
This Market is creating Inflation, the pain will be severe no matter what the pundits here say......best prepare, it is going to get very miserable around these part in a few short months.
There is no economic recovery, how can there be? The people who created this mess are still in power...its all smoke and mirrors. Prepare yourself accordingly and prepare for the worse, if you think things are expansive now you have not seen anything yet...Oh and your income continues to drop while the price of things you need go up....again prepare accordingly....this is all a mirage.
Ok, so I see the civilian labor force increased 350k, so that would bring us to an increase of 695k in unemployment. Is the other 92k farm? Are there even that many farmers?
srvbeach21 (profile) wrote on Fri, 6/5/2009 - 9:21 am
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Nonfarm payroll employment fell 345k, but the number of unemployed persons increased 787k. Anyone able to explain that one to me?
there is a separate household survey that essentially asks people whether they are employed and if not have they been actively looking for a job.
From the first question they calculated the number of people employed, from the second question they figure the number of unemployed. You don't have to have been employed and lost your job to be counted as unemployed. A college student who has graduated and is looking for a job would be counted as unemployed. The total number of people employed and unemployed changes - increases by new entrants to the labor pool (never employed or previously discouraged workers now looking for a job) and decreases by those dropping out- retirement,death and discouraged workers.
The argument for the unemployment rate being a lagging indicator is that when the economy starts to recover it brings discouraged workers back into the market looking for employment. thus increasing the pool of unemployed even though things have started looking up.
These moves on headlines that don't quite match the details of the report don't tend to hold--it'll be interesting to see how today plays out. I'm guessing the 9.4% will be more influential than the birth/death-fudged layoffs headline. On the other hand, when the market is just a handful of tradebots going head to head it's hard to say.
Sweet I am a buyer....bring it back down so I can load up while its still cheap....the trend is not your friend...the long term aspects of the US economy is nill at best.
thank you crazyv, I am less confused now, but that just leads me to believe that the 'unemployment rate' is two parts statistical fact and one part guesstimate
Oh yeah, my boss was telling me she used to get maybe 4 applicants when she ran an ad for liquor store clerk, last ad she ran she got over 70 applicants. This is to work at night and possibly get robbed/killed...It pays @ 8 bucks an hour but they do pay half your medical insurance.
That second chart is interesting. It appears as though the recessions appear to have more in common with regard to the area_under_the_curve that one might have previously guessed. It's almost as if the effect of policies as they have been implemented in each of these recessions is only lengthening the downturns, not decreasing their overall effect of joblessness.
Personally, I am more of a rip_the_bandaid_off type person.
I mean why stagnate the economy for longer than you have to, we are all mortal beings after all...
Curious open--it's not often I check my screen two minutes after the open and (1) everything's green and (2) daily lows are flashing all over the place.
Oddly enough, my company was recently, and may yet again soon be hiring. Of course, that can be directly attributed to government stimulus -- just not the United States government. China's infrastructure spending is providing more jobs to Americans than their own government's.
(Also, probably only half of the hiring was new employees -- the other half was hiring employees from other departments who would have been laid off otherwise, or hiring back employees who had been let go in the 10% reduction last November)
Thanks crazyv. That's what I figured with the 350k increase to the labor force. I assume there's a decent jump in that this time of year with all the college graduates. What's the difference between the loss in employment and the decrease in nonfarm payroll employment? Is this contract workers?
I haven't looked at this in a while- perhaps CR has some insight- but my recollection is that the household survey has more noise day to day but over a long period particularly when all the revisions and bench mark changes have taken place it turns out to be more accurate.
I think if one follows up on the unemployment rate - one aspect that hasn't got much attention this time around (at least I haven't seen it) is that the current unemployment rate understates as a comparison to previous downturns. With the aging boomers many who in the past might have joined the ranks of the unemployed have in fact elected to take early retirement.
srvbeach21 (profile) wrote on Fri, 6/5/2009 - 9:21 am
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Nonfarm payroll employment fell 345k, but the number of unemployed persons increased 787k. Anyone able to explain that one to me?
If one assumes a 2% increase in the working age population that translates into about 250,000/month so this month increase is about in line with a normal population trend line.
The 345 number that you are referring to is from the payroll survey- that is when the BLS actually asks individual employers how many people they had on the payroll unlike the household survey that is used for the unemployment rate. I have often felt that the payroll survey has more "guesstimate" in it. After many employers have moved to contract labor. So I believe that canceling a contract with a consultant would not count a payroll reduction. You would only get to that through the household survey. I should add that in the upswing the payroll data probably underestimates as well. As more people become self employed /contract employees the payroll data number becomes less meaningful- then again there is that whole birth/death model in the payroll data which I don't believe is in the household survey.
Don't short this market yet. The SPX may keep rallying for another 3 months or 3 years? who knows. pimple faced Geithner & bernanke run the show. Thay are sleezy, yes, but the stock market loves free money. wait till the distribution sets in. then short. We could see the SPX at 1200 -1300 b4 we get a nice bear market again.
good articles...http://is.gd/HGYt
The second chart (Percent Job Losses in Post WWII Recessions) is a bit misleading in my opinion because it isn't comparing apples to apples. In 1992 or 93, Clinton changed forever the way unemployment is calculated. If use the more accurate U-6, the % drop right now would be more like 8.5%. If unemployment is calculated exactly as it was pre 1993, as found at Shadow Government Statistics - Home Page the % drop would be more like 9%. Either way, the drop is way more substantial that is being reported on this graph.
My second point has to do with time to employment recovery. If you look at nearly every line, with the exception of the post-war 1948 line, it takes about as long to unemployment to unwind as it does to wind (peak to trough to peak). With that in mind, even in the best case scenario that we really are only down 4.4% and this was the last negative month, we wouldn't be back to normal until sometime in 2011.
My third point is that when you look at the graph, the more recent the recession, the longer the peak to trough to peak curve and the more regular the curve. There isn't the charp spike straight down or straight up. If you extrapolate that to our current curve, there is a lot of easing yet to happen before we bottom out.
This unemployment is so widespread this time, I don't see us reaching the trough for at least another 6-9 months, meaning we don't get back to normal until mid-2012.
The percent job losses shows something important, which we forget at times in the discussion here. The current recession exceeds all post-depression recessions already in that all the others had an uptick in employment before getting much past -4%. This time, the decline is looking like it would be stronger. Only the stimulus has a chance of giving that uptick.
The alternative was a more sharp down. A depression.
The idea was to avert a depression. The talk about "more debt" is beside the point, since the whole goal was to prevent that deeper collapse, and buy time, for new directions in the economy to get underway. In other words, like holding a drowning swimming up, waiting for help to come. Not easy, and you can't continue long. But you try. You try for a minute or whatever you can, until you can't or help comes.
Now, the only good question about that is whether it's possible to avert a depression with monetary and fiscal stimlus. Not whether "more debt" "can't help", etc.
Of course we have to pay for more debt in some fashion.
The arguments that without any interference, the economy would have a sharp down and then recover (like a "V") seem only hopeful, speculative. If that was true, why didn't the Depression last only 2 years?
No, the jobs lost to trade barriers and new taxes didn't add up to a huge drag. Something else happened in the Depression, and we already understand it.
Friday Firsty
Amid Summers Night $cream
Thank you, CR.
This article is insane:
U.S. Economy: Payrolls Fall Least in Eight Months (Update3) - Bloomberg.com
Yet, I started closing puts today anyway. Futures are up 1.5%. Time to accept we will rally on ANYTHING.
Green shoots. Better get in before you're "priced out". Three dollar gas, 6% mortgages, green shoots!!!
Wow - what great news! / snark Wait for the GM job losses to start coming down the pipe. Double digit UE, here we come.
Dow up 1000 today, since it's only half as many job losses as in previous months.
TNX to hit 4% by next week ?
TNX at 3.87
TNX = 3.86. Can you hear me now?
TNX = 3.9!
Is it time for the Even More Adverse Scenario to be developed? The Treasury needs to think how much capital the banks will need with 9.4% unemployment. I was forecasting 10% by October but I definitely have to rethink that.
lol srvbeach, I was thinking three hundred points but you are probably closer...
Not that I'm necessarily the boy looking for the pony in the pile of horse dung, but this number is significantly less than many were expecting. Mish, for example, was calling for 600K for at least the next four months.
It's bad, but not worst case. And the futures reflect this.
My brother and sister-in-law have been out of work now for 4 months after being laid off. They've both been pounding the pavement and keyboard to no avail in search of new jobs...
Their psyches are frail.
Rocky I started closing puts today anyway. Futures are up 1.5%. Time to accept we will rally on ANYTHING
Is that a sign of bear capitulation?
I have a large DXD position that I have used to hedge my long positions. It's been sickening to watch the past 3 weeks, but I am net positive 3% the last month nonetheless. The market is insane. I can only hang onto my short, because it isn't net costing me anything - but when the bubble bursts, I suspect it will be hard and fast cliff diving.
Birth/death model added 220k jobs (345+220 = 575k excluding fudging)
Duration of unemployment is 4 std dev above 25 year norm - that isn't good.
Consumer credit will only get worse.
Peterb - I believe you're referring to the weekly unemployment claims number, not this NFP number.
like richard dreyfus close encounters of the third kind, i just keep seeing the 20 yr chart of $NIKK everywhere i look
Screwed here.
I was paired long/short.
Lost my energy (oil sands, drillers) and gold longs into the trendline break the other day. Left with really nothing but treasury short, index short and some puts on a REIT.
Have to take it up the green chute, I guess.
Birth/death model added 220k jobs: I guess a lot of Chrysler workers suddenly opened up new businesses. Who knew they were such go-getters.
OT: Gillian Tett at FT addresses global scope and nature of debt issuance:
FT.com / Columnists / GillianTett - Insight: Crowded debt sales risks causing ‘auction fatigue’
It's interesting that, in each of the past few months, the unemployment rate has increased by half a full percentage point, in conjunction with the loss of 500+K jobs. This month the UE still gains half a point, but "only" loses 345K jobs. Anyone know what the B/D adjustment is for the month?
I am referring to NFP, which many have said would continue to show losses of 600K per month. This report shows those forecasts are too pessimistic.
Jim Rogers said: ""I’m afraid they're printing so much money that stocks could go to 20,000 or 30,000. Of course it would be in worthless money, but it could happen and you could lose a lot of money being short."
"Birth/death model added 220k jobs: I guess a lot of Chrysler workers suddenly opened up new businesses. Who knew they were such go-getters."
At this point, it would not surprise me to find out that the "birth/death model" jobs number taken unemployment as an input is roughly inverse linear to it.
Those who are working are not spending as much - anecdotal information here in DC as mid-sized city.
They fudged the number too much, no one believes it. They shoulda fudged it at 450K, and we'd be up far higher.
My shorts are fudged, btw.
Oil@70. What do I win?
Rajesh,
Thanks! Answered my question even before I asked it! 220K jobs?! How many did they say were added to finance and construction?
"Anyone know what the B/D adjustment is for the month? "
Or the other corner of the rug - what the revisions to previous months are?
Oil at $70?
Sheesh... gotta roll up my USO puts again.
Or maybe just enter a GTC sell stop. (not. I'm not getting picked off!)
Inverted- I'm asking the same question myself.
Happy days are here again at 9.4%.....Dow 36,000. I think Kernan sprayed his shorts on CNBC at 8:31 AM. The green shoots (and leaves) whoredom will be on fully display today. 9.4 %...pwehhh...I thought the employment market was bad or something.
So, if 9.4% was the "more adverse scenario" for end of 2009 and we are there after five months - when does this finally start to negatively impact the banks?
Payback's a bitch. From Bloomberg: "GM's Hummer Sale to Tengzhong May Fail to Clear China's Regulatory Hurdles"
FAZ is going to do exactly what DXO did
timing is crucial, but there will be a lot of money to be made
of course, i wont be making any of it....................
There's plenty of jobs available if you don't mind earning $7.50 an hour. You know the job situation is bad when financial sites are crowing because WALMART is hiring.
Novanglus - the banks are making money off the unemployment system too. There was an article about some state congress people speechifying about how JPM is managing the benefits via a card and the fees they can charge if you aren't on the ball.
This is kinda cool, for those of you who didn't see this yet - posted over at BP :
Animated jobs gained/lost map
Lest I forget -- Ken Cooper - - my F5 key sends thanks.
I was thinking the same thing, the number don't balance.
something funny with schnap's link. is that schnaps or the new interface mods?
my bad - try the link now byz - sorry
Could someone explain to me how this birth/date plays into the calculation of UE% and # of jobs lost? I don't get it.
"Could someone explain to me how this birth/date plays into the calculation of UE% and # of jobs lost? I don't get it."
The "birth/death model" is a notion of how many jobs are added or lost to the formation and disbanding of small businesses.
nullpointer: FAZ is going to do exactly what DXO did
What did DXO do? Do you mean the +4X this year or the -7X from last summer?
posts appearing by themselves... .hugely bullish news!
Out here in left coast Appalachia, the hoi unempolloiment rate is around 15% officially.
Reality is closer to 20-25%
re: jobs animation
Boy, did the Bush years suck for employment. Do you think Obama will be able to blame Bush for the last part of that animation for four more years?
Something stinks.
How can we lose 345k non farm Jobs and the number of unemployed rose by 787k?
Is it that there were more farm job losses than non farm losses?
Was it that no one would hire college graduates and they went straight to unemployed. I thought to be unemployed, you actually had to be employed at some point.
This Market is creating Inflation, the pain will be severe no matter what the pundits here say......best prepare, it is going to get very miserable around these part in a few short months.
There is no economic recovery, how can there be? The people who created this mess are still in power...its all smoke and mirrors. Prepare yourself accordingly and prepare for the worse, if you think things are expansive now you have not seen anything yet...Oh and your income continues to drop while the price of things you need go up....again prepare accordingly....this is all a mirage.
Nonfarm payroll employment fell 345k, but the number of unemployed persons increased 787k. Anyone able to explain that one to me?
SRV: it's all bullshort
Thanks, Nate. I'd like to see a 5 year chart isolating that one stat alone to see how it fluctuates.
Ah, Ken. Now I'm seeing ghosts of banishment past even when I'm not using the comment field. So something's up.
Safari v 3.2.1, OSX v 10.4.11 here.
Ok, so I see the civilian labor force increased 350k, so that would bring us to an increase of 695k in unemployment. Is the other 92k farm? Are there even that many farmers?
Guess-Ta-Mate, Who do we believe? Rove stated this morning on MSM the US Labor Dept. has no data tracking this information on unemployment.
13 cities post unemployment above 15%
13 cities post unemployment higher than 15% in April - Jun. 3, 2009
Unemployment rates above 15%.
1. El Centro, Calif. 26.9%
2. Yuma, Ariz. 20.3%
3. Merced, Calif. 18.3%
4. Yuba City, Calif. 18.2%
5. Elkhart, Ind. 17.8%
6. Modesto, Calif. 16.8%
7. Stockton, Calif. 15.6%
8. Bend, Ore. 15.6%
9. Fresno, Calif. 15.5%
10. Visalia, Calif. 15.4%
11. Redding, Calif. 15.4%
12. Hanford, Calif. 15.3%
13. Longview, Wash. 15.2%
Down goes Gold. Crisis over?
It's not uncommon to read stories of 50 people showing up for every possible job, when 20 $9 an hour jobs are offered locally by one company...
I wonder just how long it is before the 49 that didn't get the job get restless?
srvbeach21 (profile) wrote on Fri, 6/5/2009 - 9:21 am
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Nonfarm payroll employment fell 345k, but the number of unemployed persons increased 787k. Anyone able to explain that one to me?
there is a separate household survey that essentially asks people whether they are employed and if not have they been actively looking for a job.
From the first question they calculated the number of people employed, from the second question they figure the number of unemployed. You don't have to have been employed and lost your job to be counted as unemployed. A college student who has graduated and is looking for a job would be counted as unemployed. The total number of people employed and unemployed changes - increases by new entrants to the labor pool (never employed or previously discouraged workers now looking for a job) and decreases by those dropping out- retirement,death and discouraged workers.
The argument for the unemployment rate being a lagging indicator is that when the economy starts to recover it brings discouraged workers back into the market looking for employment. thus increasing the pool of unemployed even though things have started looking up.
These moves on headlines that don't quite match the details of the report don't tend to hold--it'll be interesting to see how today plays out. I'm guessing the 9.4% will be more influential than the birth/death-fudged layoffs headline. On the other hand, when the market is just a handful of tradebots going head to head it's hard to say.
JD, 50? Here we had 1K show up for about five electrician jobs. A new restaraunt had 500 applicants for 20 jobs.
Sweet I am a buyer....bring it back down so I can load up while its still cheap....the trend is not your friend...the long term aspects of the US economy is nill at best.
thank you crazyv, I am less confused now, but that just leads me to believe that the 'unemployment rate' is two parts statistical fact and one part guesstimate
Oh yeah, my boss was telling me she used to get maybe 4 applicants when she ran an ad for liquor store clerk, last ad she ran she got over 70 applicants. This is to work at night and possibly get robbed/killed...It pays @ 8 bucks an hour but they do pay half your medical insurance.
That second chart is interesting. It appears as though the recessions appear to have more in common with regard to the area_under_the_curve that one might have previously guessed. It's almost as if the effect of policies as they have been implemented in each of these recessions is only lengthening the downturns, not decreasing their overall effect of joblessness.
Personally, I am more of a rip_the_bandaid_off type person.
I mean why stagnate the economy for longer than you have to, we are all mortal beings after all...
'Dismal Scientology' is a better description of economics than the Dismal Science...
Curious open--it's not often I check my screen two minutes after the open and (1) everything's green and (2) daily lows are flashing all over the place.
burnside (profile) wrote on Fri, 6/5/2009 - 9:25 am
Ah, Ken. Now I'm seeing ghosts of banishment past even when I'm not using the comment field. So something's up.
Safari v 3.2.1, OSX v 10.4.11 here.
Likewise. Firefox 3.0.10, Ubuntu 9.04 (Jaunty)
Oddly enough, my company was recently, and may yet again soon be hiring. Of course, that can be directly attributed to government stimulus -- just not the United States government. China's infrastructure spending is providing more jobs to Americans than their own government's.
(Also, probably only half of the hiring was new employees -- the other half was hiring employees from other departments who would have been laid off otherwise, or hiring back employees who had been let go in the 10% reduction last November)
Yeah! Love the new ajax on the site. Don't have to constantly hit the refresh, now.
Thanks crazyv. That's what I figured with the 350k increase to the labor force. I assume there's a decent jump in that this time of year with all the college graduates. What's the difference between the loss in employment and the decrease in nonfarm payroll employment? Is this contract workers?
I haven't looked at this in a while- perhaps CR has some insight- but my recollection is that the household survey has more noise day to day but over a long period particularly when all the revisions and bench mark changes have taken place it turns out to be more accurate.
I think if one follows up on the unemployment rate - one aspect that hasn't got much attention this time around (at least I haven't seen it) is that the current unemployment rate understates as a comparison to previous downturns. With the aging boomers many who in the past might have joined the ranks of the unemployed have in fact elected to take early retirement.
srvbeach21 (profile) wrote on Fri, 6/5/2009 - 9:21 am
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Nonfarm payroll employment fell 345k, but the number of unemployed persons increased 787k. Anyone able to explain that one to me?
If one assumes a 2% increase in the working age population that translates into about 250,000/month so this month increase is about in line with a normal population trend line.
The 345 number that you are referring to is from the payroll survey- that is when the BLS actually asks individual employers how many people they had on the payroll unlike the household survey that is used for the unemployment rate. I have often felt that the payroll survey has more "guesstimate" in it. After many employers have moved to contract labor. So I believe that canceling a contract with a consultant would not count a payroll reduction. You would only get to that through the household survey. I should add that in the upswing the payroll data probably underestimates as well. As more people become self employed /contract employees the payroll data number becomes less meaningful- then again there is that whole birth/death model in the payroll data which I don't believe is in the household survey.
Thanks, that's very helpful.
The long Treasury future was actually positive a moment ago.
Didn't they do their B/D adjustment this month? Wasn't there a 220,000 adjustment(claiming small business hired that many).
Don't short this market yet. The SPX may keep rallying for another 3 months or 3 years? who knows. pimple faced Geithner & bernanke run the show. Thay are sleezy, yes, but the stock market loves free money. wait till the distribution sets in. then short. We could see the SPX at 1200 -1300 b4 we get a nice bear market again.
good articles...http://is.gd/HGYt
Kinda depressing that all they can talk about is the second derivative.
Three quick points...
The second chart (Percent Job Losses in Post WWII Recessions) is a bit misleading in my opinion because it isn't comparing apples to apples. In 1992 or 93, Clinton changed forever the way unemployment is calculated. If use the more accurate U-6, the % drop right now would be more like 8.5%. If unemployment is calculated exactly as it was pre 1993, as found at Shadow Government Statistics - Home Page the % drop would be more like 9%. Either way, the drop is way more substantial that is being reported on this graph.
My second point has to do with time to employment recovery. If you look at nearly every line, with the exception of the post-war 1948 line, it takes about as long to unemployment to unwind as it does to wind (peak to trough to peak). With that in mind, even in the best case scenario that we really are only down 4.4% and this was the last negative month, we wouldn't be back to normal until sometime in 2011.
My third point is that when you look at the graph, the more recent the recession, the longer the peak to trough to peak curve and the more regular the curve. There isn't the charp spike straight down or straight up. If you extrapolate that to our current curve, there is a lot of easing yet to happen before we bottom out.
This unemployment is so widespread this time, I don't see us reaching the trough for at least another 6-9 months, meaning we don't get back to normal until mid-2012.
NewCreature
<><
The percent job losses shows something important, which we forget at times in the discussion here. The current recession exceeds all post-depression recessions already in that all the others had an uptick in employment before getting much past -4%. This time, the decline is looking like it would be stronger. Only the stimulus has a chance of giving that uptick.
The alternative was a more sharp down. A depression.
The idea was to avert a depression. The talk about "more debt" is beside the point, since the whole goal was to prevent that deeper collapse, and buy time, for new directions in the economy to get underway. In other words, like holding a drowning swimming up, waiting for help to come. Not easy, and you can't continue long. But you try. You try for a minute or whatever you can, until you can't or help comes.
Now, the only good question about that is whether it's possible to avert a depression with monetary and fiscal stimlus. Not whether "more debt" "can't help", etc.
Of course we have to pay for more debt in some fashion.
The arguments that without any interference, the economy would have a sharp down and then recover (like a "V") seem only hopeful, speculative. If that was true, why didn't the Depression last only 2 years?
No, the jobs lost to trade barriers and new taxes didn't add up to a huge drag. Something else happened in the Depression, and we already understand it.
A review:
Finding the Dream: The Great Depression...and Now (updated 6-09)
thanks CrazyV for the explanation, much needed here... hard enough to
wade through conjecture, wild assumptions, etc....