January 16, 2008

Economic Stimulus Needed Now

For Immediate Release: January 16, 2008
Contact: Alan Barber, 202-293-5380 x115

Washington DC -- An aggressive stimulus package is needed immediately to address the current weakness of the US economy, according to the latest report from the Center for Economic and Policy Research and the Center for Women and Work at Rutgers University.

The Need For An Economic Stimulus Package, by economists Eileen Appelbaum, Dean Baker and John Schmitt, stresses the necessity for an immediate stimulus package equal to 1% of GDP to counteract the negative effects of the collapse of the housing bubble.

Several economic indicators point to a softening of the US economy. From the recent 0.3 percentage point rise in unemployment (a jump rarely seen outside of a recession), to a decline in consumption, the US economy is clearly in a down turn, if not entering a recession, spurred by the collapse of the housing market and the loss of trillions of dollars of wealth.

 “The US economy is almost certainly on the verge of a recession,” said report co-author Dean Baker. “ The adoption of a substantial stimulus package is needed now to lessen its toll and put the nation back on path to economic growth and sustainability.”

The proposed stimulus package consists of:

  • a $600 tax cut for all taxpayers and workers
  • an energy conservation tax credit
  • a public transportation subsidy
  • a home heating oil provision
  • a temporary revenue sharing component

In adopting this package, legislators will be taking a positive step towards shoring up the US economy and creating jobs.

The Center for Economic and Policy Research is an independent, nonpartisan think tank that promotes democratic debate on the most important economic and social issues affecting people's lives. CEPR's Advisory Board of Economists includes Nobel Laureate economists Robert Solow and Joseph Stiglitz; Richard Freeman, Professor of Economics at Harvard University; and Eileen Appelbaum, Professor and Director of the Center for Women and Work at Rutgers University.