This is bad:
The unemployment rate is expected to rise to 8.5% by the end of next year and inch even higher in early 2010, economists for Goldman Sachs wrote Friday. The cumulative trough-to-peak increase of more than 4 percentage points in the jobless rate would be the most since World War II, they said. Goldman analysts lowered growth forecasts for the next three quarters, and said they now expect the Federal Reserve to cut its interest rate target to 0.50% by December. “The main reason for these changes is the accumulation of evidence that U.S. domestic demand and production are dropping sharply,” they wrote. “We do not see a resumption of anything close to trend growth before 2010.”
While I don’t implicitly trust all of Goldman Sachs’ projections, I think this one is likely very on-target.
And here’s the thing: the Democrats aren’t going to be able to do anything to stop it. The bed has already been shat, and they’re the one party in control of the whole government now. If we’re facing 9% unemployment at the start of 2010, a bunch of Dem congressmen can start packing their bags.
What I’m trying to say here is the Dems have a roughly two-year window to enact policies that they think will be for the long-term benefit of the country. They need to hit the damn ground running and hope that the economy starts recovering by 2012. Otherwise, we could be looking at a Sarah Palin-Joe the Plumber dream ticket. Just sayin’ is all.