Saturday, January 12, 2008


(Each "Featured Question," an idea which I gleaned from A Republic If You Can Keep It, will remain toward the top of the blog until the next question appears. The previous QUESTIONS are HERE. Please scroll down for recent postings)

Most economic indicators show that the American economy is in serious trouble. Some are using the word "recession" to describe our nation's current economic status. And various politicians are scrambling to find an economic package to stimulate our nation's financial situation, which some have called a recession.
According to this article in January 19, 2008 edition of the Washington Post:
President Bush called yesterday for a $145 billion stimulus package centered on tax breaks for consumers and businesses to rejuvenate the lagging U.S. economy, a move that drew unusual bipartisan praise on Capitol Hill but did not boost confidence on Wall Street.

The principles outlined by Bush opened a path to an agreement with congressional Democrats that could come as early as next week and put as much as $800 in each taxpayer's pocket by spring, according to both sides. Bush dispensed with one of the thorniest obstacles to a quick deal by agreeing not to link it to his longstanding quest to make permanent his first-term tax cuts.

"By passing an effective growth package quickly, we can provide a shot in the arm to keep a fundamentally strong economy healthy," Bush said at the White House.


On Wall Street, however, the president's plan did little to assuage investors, who are increasingly fearful about the possibility of a recession amid a severe housing crunch, high energy prices and stagnant job growth. More bad news hit the corporate world yesterday, including an announcement by Sprint Nextel of Reston that it is cutting 4,000 jobs after numerous customer defections, and a decision by Fitch Ratings to downgrade the country's second-largest bond insurer....
Read the entire article.

According to this article in the January 19, 2008 edition of the Washington Times:
Mr. Bush, announcing the financial "shot in the arm" that was originally set to be revealed in his State of the Union speech on Jan. 28, said there is "real concern" about the economy but sought to reassure investors and consumers about long-term financial prospects.

"We're in the midst of a challenging period, and I know Americans are concerned about our economic future," Mr. Bush said. "But our economy has seen challenging times before, and it is resilient."


Mr. Bush avoided any talk of recession and continued to insist that the U.S. economy has a "solid foundation." But he admitted for the first time that the economy is in jeopardy.

"There is a risk of downturn," Mr. Bush said. "Continued instability in the housing and financial markets could cause additional harm to our overall economy and put our growth and job creation in jeopardy."


Democrats are proposing a $300 to $600 rebate check for consumers, but the rebate could go as high as $800, according to press reports.

Democrats also want to provide expanded unemployment benefits and additional food-stamp assistance for the poor.


Federal Reserve Chairman Ben S. Bernanke told Congress on Thursday that he approves of a stimulus package of up to $150 billion including middle-class tax rebates, investment tax breaks, and unemployment and food assistance for the poor.
Additional reading, worth your time, from Reuters (Hat-tip to Nanc, who emailed me the link)

FEATURED QUESTION, in two parts:
(1) Do economic-stimulus plans work, or do they result in even more damage to the economy? Feel free to state your views as to the causes of the current problems with America's economy. (2) What can individuals and families do right now to minimize the effect of the economic downturn on themselves and their families?

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posted by Always On Watch @ 1/12/2008 11:59:00 PM