From Tom Raum at The Associated Press: Obama facing huge economic challenges ahead
He can't pull back the stimulus to quickly, because that could kill a fragile recovery. If he steps to hard on the throttle to create more jobs, responding to another voter imperative, he risks feeding inflation and restarting a dangerous cycle.
More than half of the 7 million-plus jobs lost since the recession began in December 2007 vanished since Obama signed the $787 billion stimulus package last Feb. 17. That aid was intended to help reverse job losses.
The unemployment rate then was 7.6 percent. Now it's 10 percent.
President Franklin D. Roosevelt made that mistake in 1937 when he thought the Depression was over and decided to cut spending while the Fed tightened monetary policy. that only made things worse.
Forecasters say it could be years before the employment rate drops back below 8 percent, let alone to pre-recession levels of 5 to 6 percent. It took four full years for employment to regain its peak after the mild 2001 recession.
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