Aug 28, 2011 11:31 PM GMT
Irene wasn't an alien invasion, but the closest thing we can have as a stimulus:
“We are now upping our estimate of fourth-quarter GDP in the U.S. economy,” he said in an email Sunday. “Billions will be spent on rebuilding and recovery. That will put some people back to work, at least temporarily.”
Kotok expects GDP growth — which limped along at less than a percentage point for the first half of the year — to exceed 2 percent in the last three months of the year and potentially reach 3 percent.
Embedded within those projections are questions about whether Congress and President Barack Obama can set aside recent hostilities to make sure there is sufficient cash for the Federal Emergency Management Agency’s disaster relief fund. After blizzards struck last winter and tornadoes this spring, the fund has less than $1 billion available, which means that Congress might have to approve supplemental appropriations.
“Washington may set aside the usual destructive and divisive partisan political wrangling and act in the interest of the nation,” Kotok said. “That means there will be a flow of federal financial assistance to the disaster areas. We also suspect there will be a rapid response rather than Katrina-type delays. FEMA lives under a microscope these days.”