One reason that I don’t like the framing of the “are we headed for a second dip” question is that it leads to a sigh of relief when we are told that we might get lucky and merely have an extended period of stagnation instead. It makes it appear that the answer to the “should we do more to help the unemployed” question depends upon whether a double dip is ahead. But an extended period of stagnation or even a slow, slow recovery (which almost seems like a good outcome at this point) are also problematic and cry out for more help for the unemployed. With so many eyes on the double-dip question, and with policy seeming to depend upon the answer, I’m worried we’ve forgotten how unacceptable alternative but not quite as bad outcomes would be. Unless there is a miracle recovery ahead, and that’s pretty unlikely at this point, policymakers need to do what they can to increase the pace of the recovery in any case, not just if there’s a double dip. In fact, policymakers should have provided more help already — at the very least plans should be ready.
The president has promised a job creation program will be unleashed next month, but I’ll believe it when I see it and it’s hard not to wonder what took them so long. They can’t possibly just be figuring out that they need a plan to deal with this, can they? I realize there’s a legislative cycle to worry about, that they are waiting until Congress reconvene before moving forward, and it’s not like this is an emergency or anything that demands immediate action. After all, the people writing the legislation have jobs, so what’s the rush?