I meant to bring this up during the podcast this week. What happens if we do, in fact, slip into another deep recession? Where will the stimulus come from? It's clearly not going to come from Washington. There's really no solution other than waiting it out. For that matter, where will the stimulus come from to boost the current sluggish economy?
Ezra Klein isn't sure either and theorizes that this week's market sell-off is a direct result of this uncertainty.
The right question is simple enough to pose: Where will the recovery come from? The problem is that no one has an answer. And as one hopeful hypothesis after another is dashed, the markets are beginning to panic.
It won’t come from the United States. Our recovery has slowed, and updates to the Commerce Department’s growth figures have shown that the hole we’re in is significantly deeper than we realized. Thursday’s news only underscored that conclusion, as the early signs suggest that Friday’s job numbers report will be disappointing.
Plus, the president has set a remarkable precedent on economic policy: he's willing to let the people who "drove us into a ditch" take the helm again. And so it'll be virtually impossible to get the wheel back if we end up in another ditch. The White House budgetary policy is now inextricably linked to the Republican policy, which, in turn, isn't even a legitimate policy. It's a bumper sticker marketing scam with zero link to reality or functionality.