Waiting for the stimulus 'oomph'

Should President Obama seek a "second stimulus"?

Billionaire investor Warren Buffett says yes. "It looks like we're going to need more medicine, not less," he said last month. "The recovery really hasn't got going."

Obama's top economic advisor, Lawrence Summers, says no. "The [stimulus] policies appear to be working," he told the Council on Foreign Relations.

The debate over whether the 5-month-old stimulus plan is working is still a little premature, but that hasn't stopped economists and politicians from jumping into the fray. The most urgent reason for the debate: jobs.

When Obama and his aides unveiled their plan in January, they forecast that unemployment would rise to about 8% this year and peak around 9% next year. With the right policies, they said, a recognizable recovery would be underway in 2010 -- just in time for the congressional elections.

But January's forecast turned out to be far too optimistic. Last month, the national jobless rate hit 9.5%, and economists expect it to top 10% by the end of the year. In California, Michigan, South Carolina and other states, it's well above 11% already.

Even Vice President Joe Biden acknowledges that the administration guessed wrong. "We -- and everyone else -- misread the economy," he said last week.

Does that mean the stimulus is failing? Not necessarily. Jobs are often the last piece of the economy to recover in a recession. And this recovery is likely to be especially slow because many people are saving or paying off old debts rather than spending on new goods. (Economists call that "the paradox of thrift": Saving is good for individuals but can be bad for the economy as a whole.)

Still, 2010 is an election year, and jobs almost certainly will be voters' top concern when they go to the polls in 16 months. So members of Congress in both parties are reducing almost every domestic issue to a single word: Jobs. (Who says politicians can't do long-term thinking?)

Last month, when the House debated the energy bill, Speaker Nancy Pelosi said the bill was about creating "jobs, jobs, jobs, jobs and jobs"; Republican leader John Boehner said it was about "killing jobs." (It was mostly about neither.)

Pelosi issues a daily report on stimulus-program spending, trumpeting billions in highway spending in California one day and a new coat of paint for a bridge in Jeffersonville, Ind., another. Boehner responds with a daily statement of his own -- augmented, last week, by a video of a bloodhound -- asking: "Where are the jobs?"