Advocacy Forum

By U.S. Representative Mike Doyle

Our nation’s economy has officially been in a recession since December 2007. The stock markets have dropped 50 percent, housing values are down dramatically, unemployment has risen significantly and millions of families’ retirement savings have evaporated.  Americans are in more debt than at any time since the Great Depression. The situation is grave around the world as well, and it looks like we haven’t bottomed out yet.

I am confident that our economy will eventually rebound and prosper. I don’t know, however, whether our economy will recover over the next year or two – or whether the current recession will be deeper and longer than anyone now anticipates.

What I do know is that federal government can and should take effective action to help the economy recover more quickly than a hands-off approach would achieve. Not only is such a policy good for the economy, but it will help mitigate some of the suffering that millions of households are currently experiencing. We need to preserve jobs and demand for goods and services until the economy takes off again. We also need to fix the fundamental problem that’s still holding the economy down – the toxic financial assets that precipitated this crisis.

That’s why I supported the economic recovery bill enacted by Congress in February and the housing foreclosure bill approved by the House in March. The economic recovery bill will stimulate demand for goods and services over the next two years, preserving and creating jobs for workers who would otherwise be receiving unemployment compensation. It will put people back to work modernizing our infrastructure and conducting productive research, put money back in people’s pockets, encourage business investment, and prevent deep cuts in essential state and local services like health, education, and law enforcement.

In addition, the bill’s provisions to modernize our nation’s aging infrastructure and increase federally funded research in energy technologies that will be major drivers of the global economy in the decades to come will have the beneficial effect of promoting economic growth over the long run. We shouldn’t expect the stimulus bill to solve all of our nation’s problems, however.  It’s an essential part of the solution, but it will only fill the gap in demand for goods and services while we fix the underlying problem.  If we don’t get our financial sector back on track, the economy will continue to flounder.

That’s why the Troubled Assets Relief Program (TARP) and the housing foreclosure bill making its way through Congress are so important. These programs will reduce the number of mortgages foreclosed upon and liquidate other troubled assets like the credit default swaps that sank AIG, Incorporated. That should end the financial crisis and credit crunch that we are currently experiencing. I believe that in the coming years, the federal government should further increase its investment in research on alternative energy sources and energy efficiency that will help the United States achieve global leadership in an important emerging field of technology – one, I might add, in which southwestern Pennsylvania is already a leader.

Finally, after the economy has recovered, Congress will need to get the federal government’s current massive deficits under control.  As federal fiscal policy in 1937 to 1938 demonstrates, however, we need to make sure the economy’s out of danger before we turn off its life-support system. The economy will recover.  It will recover faster if the federal government takes effective action to fix the underlying problems in the financial sector and maintain demand for goods and services while it does so. The solution may be incredibly expensive, but it’s still cheaper than the alternative of doing nothing.