Romer's Last Goodbye

As it looks more and more likely that Democrats are going to cave completely to the GOP and make the Bush tax cuts for the rich effectively permanent, additional revenue that could have gone into boosting the economy is instead going to go straight to the wealthiest Americans, making it all but impossible that Democrats will do anything else to help the struggling economy.

"The only surefire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less," Romer said. "The key is that we need to take action and we need to do it quickly."

Romer mentioned additional tax cuts for the middle class, spending on infrastructure and a pending bill to boost small-business lending. She also supported additional efforts to promote exports and finalize new trade agreements. Romer defended the administration's regulatory approach as "prudent" for the economy.

Obama said this week his advisers are looking for additional tax cuts and spending measures as ways to boost the economy. Any large package will struggle to win passage in Congress, with lawmakers reluctant to approve additional spending before the November elections.

Romer's speech comes amid signs that the recovery is slowing, with the housing and labor markets struggling. The economy grew at 1.6 percent in the second quarter, lower than the initial 2.4 percent estimate. And economists are privately expressing rising concern about a possible double-dip recession.

Doesn't matter much.  Democrats are now playing to lose.  Extending the Bush tax cuts on the wealthy will do nothing to help boost anything but the net worth numbers for the top 1% of Americans...who aren't going to vote for the Democrats anyway.  It's certainly not going to make the other 99% of Americans vote for them.

A targeted jobs program would, but Republicans won't allow that to happen.  Nor will Republicans lift a finger should they regain control of Congress other than to cut spending and take money out of the economy, slowing it down even more.

It's going to be a long, long couple of years.