Posts Tagged ‘Economic stimulus’
It is widely regarded that every politician running for re-election must remember one thing: “It’s The Economy, stupid!”.
For voters, the economy (and how they are fairing in it) is usually the number one item on their priority list. For President Obama and the Democrats, the stubbornly slow US economy will likely be an important deciding factor for voters in the upcoming midterm elections.
The cartoon above paints us a picture of the dilemma facing the President. Obama inherited a devastated economy from George Bush but the voters will likely hold him responsible for its sorry state … is this fair? (cartoon by KAL)
Courtesty Good.is
Moan! Moan! Moan!
It seems everyone is in bad mood about everything these days.
People seem to be especially grumpy about the state of the economy. Just mention President Obama’s $700 million economic stimulus package to ”Tea Party” supporters and you will get an earful.
But is the stimulus working?
Infographic-centric and well-designed blog Good says: IT IS TOO EARLY TO TELL!
Politicians up for election have been quick to complain about the ill effects of Obama’s stimulus plan, arguing that jobs haven’t been created .
However, Good makes an important point – “the jury (and by “jury” I mean $278 billion in tax cuts and spending) is still out.”
Obviously, complaining about the economy (especially as it relates to the perception of Obama’s mishaps) is popular before an election cycle, especially by the minority party.
But is it really fair to bash the stimulus package before 35% of it has not yet been spent? It is a “package” for a reason. Or does it not matter at all? After all, shouldn’t the stimulus have shown some indication of it working with roughly 65% of it already out there?
Or maybe it has shown some signs of working. One publication in South Carolina looks at the new stimulus-funded advanced battery plant in Michigan that is now open as one indication of a success. What are your thoughts? Leave us a comment!
Thanks to Wikicommons.
There are many folks out there asking the big question… (editor: when does the pizza arrive?)
No… the question about the sluggish US economy : When will the country get back to normal?
Well the good news is the US economy has been recovering over the last year… but that recovery may slow in the near future.
Economic indicators seem to show that we’re not fully out of the woods. In an Editorial the San Francisco Chronicle points out that more than just the unemployment rate has shown problems:
Home sales and new construction both declined precipitously in May. The service sector contracted. Manufacturing declined by 3.5 points in June. On Wall Street, Treasury notes keep rising, which suggests that investors are preparing themselves for a period of slow growth.
Feeling this vibe the White House does not want to declare “Mission Accomplished” just yet. …read more.
Thanks to Wikicommons.
It’s spring again! Flowers are blooming, the sky is blue, the birds are out singing, and the US Democrazy staff is stuck inside attempting to win next years Pulitzer Prize (since we failed to this year).
Sadly, the economy isn’t matching the weather; or is it? Perhaps economic “green shoots” are starting to blossom?
With the Dow Jones Industrial average closing above 11,000 yesterday, the first time in 18 months, many voices are coming out declaring we’ve defeated the economic collapse.
Thanks to Wikicommons.
Candles, cake, and intense political debate, what else would anyone want for their first birthday? Especially if that special someone is the Federal economic stimulus bill!
Now, like most birthday celebrations (except for ours which you forgot) a variety of “gifts” and “wishes” have been flying in.
Led by President Obama, folks are trumpeting the stimulus as a success.
But for all the birthday cheer, there was also a load of Bronx cheers.
Some are questioning whether the bill actually helped the economy, particularly Republicans (who didn’t approve of the stimulus from day one). …read more.
Thanks to the AP and Philly.com
We at US Democrazy partied hard this weekend. No, we weren’t indulging in festive Halloween high-jinx! We learned THE RECESSION IS OVER! Yeah BABY!
Just check out these headlines:
- Ford Posts an Unexpected Profit of $997 Million (New York Times)
- 3 strong economic reports lift recovery hopes (The Associated Press)
- Manufacturing boosts global recovery (The Financial Times)
Everything is looking great, right? Time to Party!
But, then today… we woke up with a pounding headache. It wasn’t a hangover, it was some gloomy economists who ruined our party mood.
DON’T PANIC (unless you have read the graph above, brought to you by Calculated Risk).
In that case you can follow suit with us at US Democrazy and PANIC!!!!!!
New job data for the US show that unemployment has hit a staggering 9.5%.
Rest assured President Obama is taking note. He said the new number is “sobering” but reminded folks that fewer jobs were lost in June than earlier in the year.
Republicans have jumped on the rise in unemployment to target Obama’s earlier stimulus. As reported by the Wall Street Journal, RNC Chairman Michael Steele remarked,
With the unemployment rate now at 9.5% and continuing to rise, Americans need real solutions that help them find work – not bigger government, higher taxes, increased federal spending and an unsustainable national debt.
So hold on tight because this wild ride has not finished. Any wagers on what the next unemployment graph will look like?
Thanks to Wikicommons
Canada is angry at the US again (and its not due to USDemocrazy this time). Instead our neighbor to the north is spitting mad at American lawmakers’ newest policies.
Congress is currently hammering out a bill to tackle the threat of climate change. As part of that bill, congress is putting money aside to help promote Green (ie, fuel efficient) cars. The catch is… they want only to fund cars made and developed in America (not cars from our Canadian friends acquaintances)
This is not the first time US policymakers have promoted buying US stuff. In that HUGE $800 Billion stimulus bill passed a while back a ‘Buy American’ clause was included.
Canadian cities have decided that they have had enough. The Federation of Canadian Municipalities (FCM) has endorsed a “we’re ticked off at you Americans” proposal. If a country (read USA) puts trade restrictions on Canada, the FCM will support any Canadian town that retaliates with a boycott of goods from that country ( read USA).
Some Canadians think this is not enough. In a Toronto Star editorial, the paper called the FCM nonbinding resolution too soft and instead
They [America] would be more impressed by the introduction of a Buy Canada Act in Parliament.
So…Who cares what the Canadians think, as long as ‘Buy American’ helps America?
Well it seems that the provision is causing a fair amount of confusion south of the border as
the Buy American rules were being interpreted in a way that barred even some US-based manufacturers from bidding on projects.
Many US manufacturers rely on global production chains that integrate components from US and foreign sources but are finding it difficult to comply with these new Buy American rules.
So should we ‘Buy America’? The NY Times has great collection of opinions, but I’d bet yours is better so post it up.
Thanks to Wikicommons.
***UPDATE: Here are the Official Results***
Treasury Secretary Timothy Geithner has been under a lot of stress lately. (We at USDemocrazy thinks it has something to do with fixing the tanking economy.) Now it seems he has been passing this stress onto others.
The US Treasury has required major banks to undergo “Stress Tests” (like waiting in line at the DMV) to see if they are financially sturdy enough (i.e. have enough money) to stand on their own two feet without government crutches.
The results are in… sort of…
The Feds will not be releasing the official results until later today. Luckily, there have been a number of leaks to the press.
Geithner has announced the results will be “reassuring” … although anythingother than total disaster might seem reassuring in this economic climate.
Bank of America, Citigroup, Wells Fargo, Citigroup, Regional Financial, Sun Trust, KeyCorp, Morgan Stanley, Fifth Third, P.N.C. and GMAC need more money. No surprises here.
Among those banks tough enough to survive are Goldman Sachs, Morgan Stanley, MetLife, JPMorgan Chase, Bank of New York Mellon, and American Express. (You can now open the champagne and charge it to your AmEx card.)
What happens to those stressed out banks? Does the government issue Valium?
Well, it seems the banks get one month to put a plan together for raising cash.
Once the banks get their stress report cards, the pundit class will weigh in with their interpretation of the grades. The NY Times has a great collection of experts giving their two cents worth. Arianna Huffington is as vocal as ever with her opinion,
“The fact that the stress test results to be released on Thursday are unlikely to show the full extent of the sickness of our financial system is one more symptom that Obama’s economic team needs to be put in quarantine…”
We’ll see down the road how accurate these tests were. So what do y’all think? Are you and the banks stressed enough?
Have you ever submitted a project and been told to try again? We writers at USDemocrazy sure have (apparently my editor felt “Why I HATE Broccoli” is not worthy of a newsblog like ours).
Chrysler and General Motors are now facing that sting. Their plans for restructuring their failling companies have been roundly rejected by the Obama administration for not going far enough to cut costs.
When we say rejected we really mean it. Rick Wagoner, the Chairman and CEO of GM, was asked (read: ordered) to step down by the White House (no fat bonuses available for this dude) .
This means that GM has 60 days and Chrysler 30 days to come up with new ideas. No new plans, no new money.
So if their plans were not good enough, what does Obama want?
One solution that has been thrown around is is to invoke the dreaded Chapter 11, better known as bankruptcy.
WHAT? BANKRUPTCY!?! Isn’t that what Washington is trying to avoid?
In fact, no. Bankruptcy does of course mean the company closes shop. But bankruptcy is also a powerful legal tool that allows companies to avoid many contractual obligations (such as pesky union agreements).The hope is while in a temporary state of bankrutcy the floundering company can reorganize and resurrect itself.
So why has Detroit avoided the B-word like the plague? Quite simply… Who wants to buy a car from a bankrupt company (a five year warranty means nothing if the Chrysler is gone in two)?
The White House has a solution. Obama supports a plan for federal funds to cover GM and Chrysler warranties in the events the companies should go under.
Let’s hope Detroit’s next plan makes the grade. Otherwise we’ll need to change Detroit’s nickname from Motown to No Town.
Thanks to Yahoo News
Eleven percent of American homes are being, or are on the verge of being, foreclosed. OUCH!
Lucky for us, USDemocrazy’s headquarters does not fit into this category (living in a van down by the river does have its perks).
For those who are facing foreclosure is there any salvation in sight?
Not to fear, the Making Homes Affordable Plan is here. This plan will help people owing less than $729,750 on a mortgage purchased before January 1 to refinance for lower rates.
Refinancing lowers the interest rate on the mortgage. For the homeowner this means savings (not only of greenbacks but also the roof over their heads). For the bank, this means a little less money (due to homeowners paying less interest) but at least the people will pay back the loan. Lending institutions think less money beats no money at all… just ask our friends at Lehman Brothers.
Not every troubled homeowner is jumping for joy. This program will help many, but not all. Areas such as Florida that have been hit worst by the housing bust are in such bad shape that the program will not help much at all.
Whoever you are (assuming you own a property and a pulse), you or your family may be eligible for the Obama Bucks.
Just visit this fun (well, almost) and informative website brought to you by the friendly feds.
(Deep movie trailer voice)…”In a world where one man must make a choice… a choice between his political party and a federal stimulus package. That man is…
The Governator!
Well actually, it is a little more complicated than that (but we at US Democrazy have been observing some political maneuvering worthy of an action movie).
Here’s the plot… President Obama presents a stimulus bill with money galore to give to all 50 states. Good news, right!?!
Well! All the Republican Representatives in Washington and all but three of the GOP Senators voted NO to the stimulus bill. This near unanimous denunciation gave the impression that all Republicans anywhere thought Obama’s plan wasn’t worth the 500 pages it was written on…
Apparently California’s governor, Arnold Schwarzenegger, and Florida’s, Charlie Crist, (both Republicans) did not get the memo. Both supported the stimulus bill. Crist went so far as to say that Republicans should give Obama “a shot.”
Don’t worry — not every Republican governor rebelled against their party like Arnie and Charlie. The Governor of Lousiana, Bobby Jindal, mentioned that he might not take all of Obama’s stimulus money, fearing it would cost more down the road. Five other Republican Governors have also voiced similar opposition.
Obama has announced first of the stimulus funds will be going out this week. When the big buckeroos start flying out to state capitals around the country… it will be interesing to watch who will and who won’t take the cash!
We’ll see how our sunshine boys from California and Florida deal with this situation. Minnesota Governor Tim Pawlenty said “When you’re paying to buy the pizza, it’s okay to have a slice.”
Nobody knows how to talk deals like the auto salesmen… Yesterday however, General Motors (GM) and Chrysler were hawking restructuring plans, not cars. (Although while researching this blog post, we at USDemocrazy somehow got talked into a lease with extended warranty.)
To understand why the automakers were in sales mode, let’s voyage back a long long time ago, to a galaxy far far away… (Actually, it was just the end of 2008 in Washington DC.)
The big wigs of GM and Chrysler visited the nation’s capital asking for a small bailout (their idea of “small” ended up being about $17.4 billion in loans). These loans were granted… but with strings attached. The nice men and women on Capitol Hill told the the Detroit big wigs to drive (not fly) home and figure out strategies to make their companies competitive in the 21st century (not the 20th century where the companies has been languishing).
Well, these plans were due yesterday. Both GM and Chrysler submitted their own (albeit nearly identical) sales pitches and waited to see if Congress was going to buy…
Key topics included the need to cut labor costs and update their car designs (apparently Americans have discovered they don’t need cars that are bigger than their garages).
GM and Chrysler also came seeking more money (the “paltry sum” of $30 billion and $9 billion respectively).
“Heck, it’s only about $40 BILLION!” GM and Chrysler exclaim. Should they get their teensy-weensy bailout… let’s see if our chums in Detroit stick to their plans. Your eagle-eyed team at USDemocrazy will be watching…
You have probably noticed that things are pretty rocky in the financial world these days…
It is so rocky in fact, we at USDemocrazy would love to take a long vacation from all this nonsense. But we have learned from our Economics correspondant that if our escape plans include Europe, we better think again. It seems we Americans have done a fine job exporting our crisis THERE (much to the European’s annoyance).
These days things are not so different for people in Paris, Bonn and London as they are in New York, Los Angeles and Baltimore. It seems all those foreign folks are more like the US than we ever thought…
First, everyone in Europe from bankers to consumers have panicked (just like we did).
The European Union’s central bank ( their equivilent of our Federal Reserve Bank) has cut interest rates (just like in we did) hoping (just like we did) to kickstart their economies.
This kickstart didn’t start (just like for us). So now our European friends are thinking about food ( we never Stop thinking about food)… they are cooking up some stimulus pies (just like we did, only their cooking is normally tastier). Germany, France and other nations are now hoping their pies will feed and nourish their economies.
Basically, it seems that we and our friends across the water are in the same financial boat. Fixing this globalized mess means we all sink and swim together (if only we had more pairs of water wings!).
Image courtesy of the BBC.
The USDemocrazy Economics correspondant has been a busy lad. First, he had to ingest the mountain of important economics news that is currently bombarding the concerned citizenry. Next he has to try and explain all this info to a dazzled USDemocrazy staff… This is what he taught us :
A US Treasury bailout for America’s troubled banks was outlined yesterday. The outline was made up of four parts.
Clean up toxic assets
Revitalize lending
Prevent home foreclosures
Ensure bank stability
Our economics guru then refreshed our idle memories with an outline of past Treasury programs. The new program, we were told, seeks to be larger and with new bells and whistles.
America’s baby faced Treasury Boss Tim Geithner announced this new plan… to mixed results (closer to torches and pitch forks then out stretched arms). Stock prices dropped due to concern about the vagueness of the plan( not a very good sign). Some also feared that the plan would not do enough (It is amazing how little 500 billion to 1 Trillion can make).
Well with this much money something’s sure to happen (even if that something is nothing). As long as our computers are not repossessed, the able team at US Democrazy will be here to explain these important happenings (or at least share in your confusion).
Image courtesy of www.ustreas.gov
