From Bad to Worse

Mr. Krugman is getting pretty pessimistic. I am sympathetic.

I’ve been ruminating over economic prospects for next year, and I’m getting scared.

Two points:

1. The economy is falling fast. We’ll see what tomorrow’s employment report says, but we could well be losing jobs at a rate of 450,000 or 500,000 a month.

2. Infrastructure spending will take time to get going — a new Goldman Sachs report suggests that projects that are “shovel-ready” are probably only a few tens of billions worth, and that a larger effort would take much of a year to get going. Meanwhile, it’s very questionable how much effect tax rebates will have on consumer demand. So it may be hard for stimulus to get much traction until late 2009 — and that’s even if Congress goes along, which may be a problem given all the bad analysis and disinformation out there.

So here’s what I’m wondering: will it, in fact, even be possible to pull the economy out of its nosedive before unemployment goes into double digits? I’m starting to wonder.

Don't tell anybody but as of yesterday yours truly became a statistic. Not a real shock considering how bad the year has been and how bad the prospects are for next but still not a fun thing to experience. Hence not much posting today as I am busy battening down the hatches for a storm, so to speak. I am going to need all the change Obama can get going and pretty damn quick.