Michael Ettlinger

What can Congress do to help the economy recover?

There are a number of measures Congress should take to get the economy moving again. One thing Congress should do is enhance unemployment benefits and do other things that help those who have been hit hardest by the economic downturn. That both helps people in need but it also puts money in people's pockets so they can spend it, which helps the economy.

Another thing Congress should do is make a big investment in infrastructure. Infrastructure spending helps our economy in the long run, and it also creates many jobs.

Another thing Congress should do that creates jobs is make a big investment in green energy, in things like weatherizing buildings and other measures that will help us gain energy independence and energy efficiency while also creating jobs.

Another measure is to help states. States right now are facing big financial shortfalls because of reduced tax collections, because of the declining economy, and they're having to lay people off, they're having to cut back on programs, all of which is very bad for the economy.

In addition, one other measure that's likely to be part of any package is a selection of tax cuts.

Why do we need a second stimulus, and how big should it be?

The economic situation is very bad. Unemployment is on the rise, and the outlook is not very favorable for the next six to eight months. For that reason we think that the stimulus package that Congress passes should be a robust package, should be a large stimulus by historic standards, and our recommendation is that it be at least $300 billion.

How will this spending and investment help the economy recover?

The premise behind a stimulus and recovery package is that we face the risk of a downward spiral, where consumers spend less, businesses lose confidence that they will have customers for their products, so they don't make investments and don't hire people. That in turn creates even less demand for products in the economy and it just keeps going on and on and gets worse and worse. The idea of a stimulus package is that it quickly puts money out into the economy to increase consumption, to increase spending, so that businesses can have confidence that if they make investments, if they hire people, there are consumers for their products which warrant those kinds of expenditures on their part.

In addition, by the end of this year, we're likely to be short over 2 million jobs, and direct expenditures that will increase the number of jobs in the economy are very important to get the economy moving again.