By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression.
Bad start; that is not at all clear, and certainly there is no consensus in the economics profession that this is true.
Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.
That's a possibility, but only one possibility. Another is that if nothing is done the normal forces of supply and demand will work, as if by an invisible hand, to stabilize the economy.
Yet another possibility is that if 'something' is done by self-interested politicians, and it is the wrong thing (and at the wrong time) that will make things worse. That is, have a depressing effect rather than a stimulating one.
In the rush to shovel money to their friends, the Nancy Pelosis and Harry Reids of the world risk misallocating hundreds of billions of dollars to less highly valued resources. Which would make it all that much harder for the American people to re-organize their lives in ways that would allow the kind of prosperity we enjoyed for a quarter century (1983 through 2007) to return.
There is nothing in history to suggest that the current legislation before congress will have the effect that Obama is promising. Even his own Chair of the Council of Economic Advisers, Christina Romer, admitted as much last month when testifying at her confirmation hearing.