Everything's Fine, We're Fine Here, How Are You?

I'm beginning to honestly think the Democrats' plan is to lose on purpose and put the Republicans in charge of Congress just in time for our economy to collapse.

The U.S. economy will improve slowly and another round of fiscal stimulus probably wouldn’t be effective, former Treasury secretaries Paul O’Neill and Robert Rubin said.

Rubin, who served under Democratic President Bill Clinton, said the U.S. is “going to have slow and bumpy growth,” during a taped interview on CNN’s “Fareed Zakaria GPS” aired today. A “major second stimulus” might create more uncertainty and undermine confidence, he said.

Companies concerned about demand won’t expand facilities or hire new employees until sales have improved, said O’Neill, who was Treasury secretary under Republican President George W. Bush. “We are moving forward at a pretty gradual pace,” he said. “But I don’t think things are terrible.”

The world’s largest economy may be cooling in the second half of the year as a scarcity of jobs limits consumer spending. At the same time, concern about the surging fiscal deficit has prompted President Barack Obama to urge lawmakers to let the Bush administration tax cuts for the wealthiest Americans expire this year.

While Rubin backed Obama’s stance, O’Neill reiterated that he strongly opposed the Bush tax cuts of 2003 and said the president and U.S. lawmakers need to focus on overhauling the entire tax system rather than on the expiring cuts. 

Atrios sums it up:

Oh, wait, demand is a problem. So the solution is to...do nothing to help demand.

Got it.

Playing to lose is all I can think of.  9.5% unemployment and 16 million Americans out of work is just fine with O'Neill apparently.  Another stimulus will ruin "confidence" while continued deflation will...what?  Make people want to buy more?

We're done, folks.  Enjoy the ride down, because the elevator cable just got cut.