Because if we don't move swiftly to put this plan in motion, our economic crisis could become a national catastrophe. Millions of Americans will lose their jobs, their homes, and their health care. Millions more will have to put their dreams on hold.
What our president is saying is that a national catastrophe happens when unemployment reaches reaches a certain number, or foreclosures or rent evictions rise to a certain level, or some number of people cannot afford heath insurance. The common denominator is loss of income necessary to maintain the basic necessities of life. Note that this is a quantitative argument, as we have always had citizens without jobs, homes, or health insurance.
What is scary about our current economic predicament is that other types of catastrophes are looming. The one that Obama mentioned is the usual catastrophe brought on by the usual business cycle of recession, recovery, and expansion.
The other catastrophes include
(1) bank failure, where the ATMs and credit cards stop working
(2) hyperinflation, where greenbacks lose their value, absolving all dollar-based debt and wiping out all savings
(3) stock market crash, where equity-based retirement accounts get wiped out and old people must depend on the kindness of strangers and/or their families
(4) economic loss due to global climate change, that is, more devastating hurricanes, tornadoes, heat waves, and wintry weather
(5) a haves vs. have-nots scenario, where ownership of assets is concentrated in the hands of a few percent of the population and everyone else is impoverished
(6) Jim Kunstler's Long Emergency scenario, where our way of life becomes unsustainable due to the depletion of energy resources and the organization of American homes and buildings around automobiles.
As to the probability of any of these other catastrophes occurring, I have no idea. One must imagine that the transactional functions of the banking system would be maintained at all costs, as this is the circulatory system of the economic body. The fed is supposed to be keeping inflation in check. The stock market is more of a symptom than a cause, that is, when the business cycle recovers, the market should recover. A consensus on the economic effects of climate change is undeveloped.
The last two catastrophes may be the same and both concern our nation's energy policy. Breaking us of our oil addiction is the key policy we must embrace. Kudos to Mankiw for suggesting a Pigovian tax on gas but it seems not to have a snowball's chance in hell of getting enacted by a politician.
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