When big bank speculation crashed the economy, millions were driven into unemployment. But, according to a new study by two leading economists,
the combination of the Troubled Asset Relief Program (TARP) loans to
banks, loosening of the money supply, and federal stimulus funds for
states and individuals, helped stop a far worse potential full-out
Depression that would have left an additional 8.5 million Americans
without jobs on top of the 8 million who have lost their jobs since the
recession started-- what would have been a nearly doubling of the job
loss due to the economic crisis.
The fundamental challenge in this recession is that the growth that
preceded it was a mirage. Bubble era borrowing created a network of
financial jobs, real estate jobs and construction jobs that collapsed
with the end of the bubble. Many of those jobs will never return.
An extremely high proportion (75%) of job losses in this recession are
permanent rather than temporary. States will need to nurture
completely new industry sectors and the infrastructure to support those
jobs, while the jobless will need retraining in new skills to
participate in those sectors.
NEW YORK - For at least 30 cash-strapped states counting on federal
stimulus money, the news was a stunning blow: A deficit-weary Congress
had rejected billions in additional aid, forcing lawmakers into a mad
scramble to balance their budgets.
Now, with a new fiscal year just days away in most states, many
governors are proposing to make up for the shortfall with tax increases,
cuts in essential services and potential layoffs of thousands of public
State governments may seek
additional funding for up to three additional years on broadband
projects. The announcement comes from the National Telecommunications
and Information Administration (NTIA) who recognized
that "better data and strategic planning are needed on the state level.
The Council of Economic Advisers (CEA) recently released its third
quarterly report on the impact of the American Recovery and
Reinvestment Act (ARRA). The report generally confirms what economists across the board
have concluded: the Recovery Act has prevented a full economic
collapse; generated millions of jobs; boosted national economic
performance; and provided sorely needed state fiscal relief.