Thursday, January 17, 2008

In Case You Didn't Realize it the Shit has Hit the Economic Fan

This today from MSNBC:

Bush, Bernanke endorse economic stimulus

WASHINGTON - President Bush and Federal Reserve Chairman Ben Bernanke on Thursday embraced calls for an economic stimulus package to avert recession. Bernanke said such a plan should be aimed at quickly getting cash into the hands of people, especially those with low and moderate incomes.

The Fed chief, in testimony to the House Budget Committee, said efforts that involve “putting money into the hands of households and firms that would spend it in the near term” would be more effective than other provisions, such as making Bush’s tax cut permanent. “Again, I’m not taking a view one way or the other on the desirability of those long-term tax cuts being made permanent,” he said.

While shying away from endorsing a specific plan, Bernanke made clear his support for the general concept of an economic rescue package and that it be temporary so that it won’t complicate longer-term fiscal challenges. It is likely that any such package would include tax rebates.

“We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” Bernanke told the budget panel Thursday, echoing the same — and unusually frank — language he used last week to signal the Fed’s next move.

Although Republicans and Democrats differ over what provisions should be part of any economic stimulus package, there’s widespread agreement that tax rebates along the lines of the $300-$600 checks provided in 2001 are likely to be part of the measure. The country last suffered a recession in 2001.

“To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next 12 months or so,” Bernanke told lawmakers. The notion behind the rebates, for instance, is to get money into the hands of consumers quickly so that they boost spending, helping energize the national economy.

Now. I'm no economist. But I do understand a few things. And from what I understand if you have a republican administration talking about giving money back to, "people, especially those with low and moderate incomes." then the economy is in bad shape.

70% of our GDP is based on spending. Our spending. So if we stop spending the economy contracts. As the article mentions it's important to make sure whatever "stimulus" is done that it targets lower income people 'cause, unlike the rich who only spend part of their reimbursements, poor folk spend all of theirs.

Mind you all of this is being done to help "prevent" a recession.

Newsflash: if you are waiting for the MSM to tell you there is a recession then you must be one of those people who bought a house at the top of the market in 2006 because you just "knew" you were getting a great deal and would be able to flip it the next week. Housing bubble? What housing bubble?

These are bad times. And they are only going to get worse. NOW is the time to get your financial house in order. Downsize your life. Generate extra income. Now is the time.

Don't wait for the MSM to tell you what you can easily see for yourself.

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