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Doyle: Strong federal stimulus needed to tackle recession

A federal stimulus package focused on "getting people to work" would stem widespread unemployment, Gov. Jim Doyle said as he warned about an upcoming budget plan without "any big new initiatives of any kind."

While he is hopeful that a federal stimulus package will provide relief, Doyle cautioned that there isn't a cure-all for the ailing economy.

"There is real risk that (the economy) gets worse but I think that without a major stimulus package it almost certainly will," Doyle said in a year-end interview. "So I think people have to recognize this is not going to be an immediate turn-around."

Doyle, in an interview with WisPolitics.com at the Executive Residence, said the most significant change Wisconsin will see under Barack Obama is the "economic recovery package that's actually directed at getting people to work. It isn't gonna be 'Here banks, have a bunch of money and we're gonna see what happens." Several days after the WisPolitics interview Doyle joined four other Democratic governors in a call for the federal government to deliver a $1 trillion aid package to the states over the next two years to help them get through soaring budget deficits due to a faltering national economy.

The governors’ wish list included: $250 billion for education grants; $250 billion for programs like food stamps, assistance for needy families and state unemployment trust funds, many of which are near depletion; $350 billion for infrastructure, including roads, trains, bridges, broadband and public housing; $150 billion for middle-class tax cuts.

Doyle said it would be a tragedy for the country to complete its economic recovery in four or five years only to look back and see a severely damaged educational system. The $250 billion for education over the next two years would go to states with assurances that it would help maintain education at 2006 levels.

“It would be a terrible disaster for this country to see our education system move backward,” Doyle said. The same day as the conference call, the state Department of Revenue said key indicators show the Wisconsin economy has entered a recession. The DOR's press release also says total state employment is expected to show a 0.6 percent decrease in 2008 and a 2.2 percent drop in 2009, with recovery beginning toward 2010.

In the year-end interview Doyle, entering his seventh year in the governor's office, said by the accounts he's heard, the recession, which began at the start of 2008, will continue through the first quarter of 2010. "Recessions of that length do real long-term damage to countries," he said.

Doyle said unemployment numbers are expected to rise nationally, and he doesn't expect Wisconsin to be immune to that trend. "We have just seen the biggest single-month jump in unemployment since the Depression. So it's a huge challenge. I think without this stimulus package it would go up dramatically higher," Doyle said.

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