If this doesn't focus the mind on the need for a large stimulus package, I don't know what will. Krugman says that 800 Billion is not enough. It's beginning to look like he may be right.
According to the CBO’s estimates, we’re facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion. Others, such as Goldman Sachs, are even more pessimistic. So the original $800 billion plan was too small, especially because a substantial share consisted of tax cuts that probably would have added little to demand. The plan should have been at least 50% larger.
From Time:
1) January's 0.44% drop in nonfarm payroll employment was the worst one-month drop since May 1980, when employment fell 0.47%. (There was also a 0.44% drop in November 2008, but that was rounded up from 0.438% while January's was rounded down from 0.442%.)
2) The three-month fall in employment of 1.30% was the worst since the 1.71% drop from Dec. 1974 to Feb. 1975.
3) The six-month fall in employment of 1.93% was the worst since the 2.09% drop from Dec. 1974 to April 1975.
4) The nine-month fall in employment of 2.23% was the worst since the 2.36% drop from Oct. 1974 to July 1975.
5) The twelve-month fall in employment of 2.53% was the worst since the 2.62% drop in the 12 months ending in November 1982
The lesson here: Maybe I should stop wasting my time playing with spreadsheets. As measured by the percentage drop in payroll employment over most of the time periods I looked at, this is the worst since 1974-1975. And barring a dramatic recovery in the next couple of months, the total job losses from this recession will likely come out even worse than those of 1974-1975.
