January 14, 2010
The number of jobs in the United States has declined almost every month since December 2007. Nearly all professional forecasters believe that the economy has begun to recover from the recent recession, but many also predict that the pace of the recovery will be slow and that unemployment will remain high for several years.
At the request of the Chairman of the Senate Budget Committee, CBO has examined the potential role and efficacy of fiscal policy options in increasing economic growth and employment, particularly over the next two years. This paper updates and expands upon a January 2008 CBO analysis, Options for Responding to Short-Term Economic Weakness, and a January 2009 CBO testimony, The State of the Economy and Issues in Developing an Effective Policy Response.