The US jobless rate just reached 8.1 percent, the highest in 24 years. Republican economist Martin Feldstein, the guy the Republicans quoted during the stimulus bill debate, has joined the chorus of those calling for another large stimulus bill.

Meanwhile, determined to be seen as both irrelevant and irresponsible, Senate Republicans held up the Ominibus Budget Bill yesterday because . . . it had too much spending for near-term projects.

Feldstein can read the numbers, and they’re all bad; today’s jobs report says things are getting worse. Feldstein notes Americans have just suffered a $12 trillion loss of wealth, so "the US economy faces a US$750 billion shortfall of demand." He then adds:

Although the recently enacted two-year stimulus package includes a total of US$800 billion of tax reductions and increased government spending, it would be wrong to think that this will add anything close to US$400 billion a year to GDP in each of the next two years. Most of the tax reductions will be saved by households, rather than used to finance additional spending.

Moreover, a substantial part of the spending will be spread over the following decade. And some of the government spending in the stimulus package will replace other outlays that would have occurred anyway. An optimistic estimate of the direct increase in annual demand from the stimulus package is about US$300 billion in each of the next two years.

The stimulus package would thus fill less than half of the hole in GDP caused by the decline in household wealth and housing construction, with the remaining demand shortfall of US$450 billion in each of the next two years causing serious second-round effects. As demand falls, businesses will reduce production, leading to lower employment and incomes, which in turn will lead to further cuts in consumer spending.

But Senate Republicans aren’t listening to their own experts. They’re focused on 2 percent of the Budget Bill, trying to paint a picture that specific projects Congress asked for, things that can be done this year, are inherently wasteful. But their real targets are increases like this:

The big increases — among them a 21 percent boost for a popular program that feeds infants and poor women and a 10 percent hike for housing vouchers for the poor — represent a clear win for Democrats who spent most of the past decade battling with President George W. Bush over money for domestic programs.

Feldstein agrees the spending should be targeted for stimulative effect:

A second fiscal stimulus package is therefore likely. However, it will need to be much better targeted at increasing demand in order to avoid adding more to the national debt than the rise in domestic spending. Similarly, the tax changes in such a stimulus package should provide incentives to increase spending by households and businesses.

Republicans could start climbing out their self-imposed dungeon by offering to forego their own member’s "wasteful spending" and substitute more effective spending or tax "incentives to increase spending" if the Democrats would meet them half way. But they’d rather obstruct the whole process and express mock outrage on Fox News.

Update: Per NYT coverage of the budget bill vote: It seems Dems were one vote short of 60. As commenter Kassandra notes below, "we could have used Franken yesterday." But we also lost Evan Bayh for the wrong reasons, and Russ Feingold, because he never votes for ominibus bills with lots of earmarks. And we lost two [Dem]Senators [Mendendez and Nelson] because the bill relaxes, in a small way, restrictions on visits to Cuba — so the economy is tanking, and these guys are still stuck in 1961 at the Bay of Pigs.

[Correction: the two Senators voting against because of Cuba were Menendez (NJ) and Nelson (Fla). More details at TPM.]
(h/t Economist’s View)