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New unemployment figures for the month of June have put a severe damper on the economic optimism of past months. After four months of slightly less grim statistics which were being hailed as the “green shoots” of an economic revival, employers shed more jobs in June than expected. Stocks on Wall Street plunged in response. Since the recession began last year, the US economy has lost more than 6 million jobs. President Obama’s $787 billion stimulus plan passed earlier this year has, according to some economists, had positive effects, but not enough. To that effect, the AFL-CIO has called for a second stimulus package to shore up the effects of the first one. Meanwhile several states around the nation, including California, are struggling to close their budget gaps. While states are required to balance their budgets, there is no such requirement at the Federal level. This has led some to reiterate calls for federal aid to bankrupt states in order to stave off cuts to social services which can be economically catastrophic on their own. Economist Dean Baker of the Center for Economic and Police Research, who warned repeatedly of the coming crash in 2007 has just published an article for the Guardian of UK called The Green Shoots are Dead.

GUEST: Dean Baker, co-director of the Center for Economic and Policy Research (CEPR), author of Plunder and Blunder: The Rise and Fall of The Bubble Economy

For more information, visit www.cepr.net.