Jobless claims remained high, while consumers cut back on spending by the largest amount since the 2001 terrorist attacks. The new government reports also indicate that orders to U.S. factories dived, and homes sales fell to the lowest level in nearly 18 years.
“As soon as the recovery is well under way, we need to set up a long-term plan to reduce the structural deficit and make sure we are not leaving a mountain of debt for the next generation,” Obama said during the press conference in Chicago.
The statement indicates that Obama is willing to continue high deficit spending throughout the recessionary period.
With the government scraping the barrel for cash, it may end up drying up credit markets further rather than freeing them up as intended. In effect, the government is borrowing money and then infusing into ailing institutions hoping they will resume lending out money. However, many of these banks are such bad shape they need to raise cash to keep their books in order.
And what may be enough to keep a specific institution afloat one day, may not be enough the next day depending on the stock market, the value of the bank's holdings, and other conditions. So some banks may very well be "black holes," while on the other hand the credit market is not an "inexhaustible vessel of plenty."
guardian.co.ukVolcker Tapped for Advisory Role
Wall Street Journal -2 hours ago
By JONATHAN WEISMAN President-elect Barack Obama will appoint former Federal Reserve Chairman Paul Volcker on Wednesday to be the chairman of a new White ...
Obama Names Volcker to Head Panel on Reviving Economy (Update3)Bloomberg
Obama chooses Volcker as economic adviserMarketWatch
Obama picks Volcker to head economic groupCNNMoney.com
1 comment:
What is wrong with giving the American household a check for $13,000? The $13,000 would do much better in the people’s hands. The $13,000 is less than the government is spending on the original bailout and the new proposed $800 billion. If an economic advisory board cannot put the people before their selfish reasons something is very wrong. If the people had the money they would spend it and then jobs would be added, manufacturing would grow, and last but not least the states would gain money in the form of sales taxes not to mention the added income taxes from the extra workers.
http://nomedals.blogspot.com
Post a Comment