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GUEST: Dean Baker, Co-Director of the Center for Economic and Policy Research

According to the latest figures from the Department of Labor, the U.S. economy is experiencing the highest rates of inflation in seventeen years. Consumers have acutely felt the effects at the gas pump and the check-out line. The costs of energy and food have sharply increased at the highest rate since 1990. Energy prices rose 17.4%, including a 29.6% jump in gas prices, while the price of food upped 4.9%. In another report on the health of the economy, the Federal Reserve noted that industrial output is slowing down in key areas. Meanwhile there has also been a significant one-month increase in the unemployment rate. Those who are employed have seen their inflation adjusted wages continue to drop. These economic indicators early in the new year have sparked fears of a possible recession. President Bush is expected to propose economic proposals in his upcoming State of the Union address. Noting that financial woes are among the greatest of voters’ concerns, Presidential candidates are offering their own plans to stimulate the economy.

For more information and to download the report on the proposed stimulus package, visit www.cepr.net.