MORAGA — The nation needs hundreds of billions more in federal stimulus spending, some experts told an economics conference at Saint Mary's College this week, but some audience members gave the academics an earful and blasted the proposals.
The conference, sponsored by the college's Moraga-based Center for the Regional Economy, was organized to offer a range of views about the economic woes in the United States and what might be done to banish them.
"I don't believe the stimulus package is adequately addressing the problems of jobs and unemployment" in this "epic recession," said Jack Rasmus, who teaches economics and political economy at Saint Mary's College. Rasmus was one of the speakers at the Moraga event.
Why is more spending needed? For government intervention to succeed, Rasmus believes that federal spending will have to reach roughly 40 percent of the nation's total economic output as measured by the gross domestic product.
"The New Deal did not get us out of the Depression," Rasmus said. "The Great Depression only ended when government spending rose to 40 percent of GDP in 1942 and 1943."
Those were, of course, the first two full years of America's involvement in World War II. However, the government spending in that case was arguably a one-time event: a global conflict.
Some audience members expressed skepticism and opposition regarding spending potentially another $1 trillion or more on a fresh round of spending programs. The current and prior string of bailouts and government spending have not produced evidence they will halt the economy's nose-dive.
"Government got us into this mess and a lot of you seem to think that more government spending is the answer," said T.J. Noto, a Los Gatos resident, Silicon
Valley entrepreneur, and Saint Mary's alumnus. "I couldn't disagree more."
Noto wasn't alone in his disdain for more government spending.
"The government is just pouring more money into this and devaluing everything," said Michael Bugglin, a Moraga resident and construction worker. "Everyone here is saying we need to spend more on this. I completely disagree with that."
One of the academics, Kris Chase, director of the Center for the Regional Economy, and a Saint Mary's professor, said it's possible the Bay Area will be more insulated than other regions from the downturn.
"We have the knowledge-based industries that can adapt the best," Chase said. "The Silicon Valley entrepreneurial spirit permeates the area."
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