Slow-Motion Recession: What Congress Can Do to Help

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July 2008, Eileen Appelbaum, Dean Baker and John Schmitt

This report presents several proposals designed to address the nation’s current economic slowdown. To blunt the effects of this downturn and provide immediate relief, the authors suggest a second stimulus package. Proposals for the package include an expanded tax credit for homes and businesses to make energy conserving renovations, subsidies for state and local governments to reduce fares on public transportation, matching grants to state and local governments to invest in energy conserving renovations, grants to state and local governments so that they will not be forced to raise taxes and/or layoff workers and cut services in the middle of a downturn, additional payments to low- and moderate-income households through programs such as Food Stamps, School Lunches and the Low Income Heating and Energy Assistance Program to make it easier for families to cope with rising food and energy prices, modernization of the unemployment insurance system and further extension of the benefit period. To promote continued, sustained growth, the paper suggests policies that will require restructuring the U.S. economy to protect homeowners, reel in financial markets, and to restore some balance to our work and family commitments.

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