Given intensifying concern about size of federal budget deficits, any new spending - such as another stimulus package - will be politically perilous.

From The New York Times:

Many experts envision a jobless recovery, in which the economy grows but job losses persist. That would reprise the end of the last recession in 2001, when payrolls continued to decline for nearly two years afterward.

Such an outcome would confront the Obama administration with a potentially nettlesome political problem heading into next year’s midterm elections. After the government unleashed $787 billion to stimulate economic growth, and after it bailed out financial institutions and the auto industry, the unemployment rate exceeds worst-case projections envisioned by the administration early this year.

If the jobless rate continues to climb, as is widely expected, that could generate pressure for another stimulus spending package. But given intensifying concern about the size of federal budget deficits — now projected to exceed $9 trillion within a decade — any new spending could be politically perilous.

After years of borrowing against soaring home values, tapping credit cards and harvesting stock market winnings to spend in excess of their incomes, millions of households are being forced to conserve. That limits consumer spending, which makes up 70 percent of the nation’s economy. And that makes businesses that might otherwise hire and expand more inclined to hunker down.

In recent months, the economy has benefited from a slowdown in the pace at which businesses have slashed inventories, prompting factories to expand production. Auto sales have been aided by the cash-for-clunkers program, which gave buyers incentives to trade in cars. Home sales have been stimulated by a tax credit for first-time homebuyers, an inducement that expires in November.

After those programs wear off, the nation may again confront a fundamentally weak economy.