Tag Archives: economy

GOP seeks to trim stimulus, cut deficit – Washington Times

GOP seeks to trim stimulus, cut deficit – Washington Times.

Economy improves with billions unspent

With the economy showing signs of recovery, fiscally conservative economists and Republican lawmakers are suggesting that the large unspent portion of the nearly $800 billion stimulus fund should be redirected to slash this year’s nearly $2 trillion annual deficit.

Democratic lawmakers, Obama administration officials and many economists doubt the wisdom of truncating the stimulus program so soon after it began. But Republican congressmen and economists who were not thrilled with the stimulus effort are increasingly calling for it to be foreshortened as a return to economic growth appears closer at hand.

Administration accounting shows that relatively little of the stimulus funds that would directly create jobs have been spent. The White House says $112 billion from the stimulus account has been spent or obligated. In addition, much if not most of the economic recovery expenditures have been spent to pay for state assistance, unemployment and Medicaid benefits, and other safety net programs that would create few if any new jobs.

Nevertheless, there are increasing reports that key sectors of the economy are beginning to show modest signs of recovery.

Obama looks to ‘accelerate’ stimulus

Construction spending is up slightly for the second straight month, factory orders rose 0.7 percent in April, existing home sales were up three months in a row, and banks have begun raising capital again and showing signs of growth. These and other economic signals have sparked a rally on Wall Street that has raised stock values by more than 30 percent since March.

No one suggests the economy is out of the woods. The unemployment rate, always the last economic figure to show improvement in the aftermath of recessions, continues to climb, rising from 8.9 percent in April to 9.4 percent in May — though the figure of 345,000 jobs lost last month was sharply below economic forecasts and marked the fourth straight month that the pace of layoffs has slowed.

That is one of the reasons why top economists such as Ben S. Bernanke, chairman of the Federal Reserve, see the pace of the nation’s economic contraction slowing and entering a recovery stage later this year. A survey of 45 economists by the National Association for Business Economics (NABE) Outlook reported late last month that the end of the recession is near.

“The good news is the NABE panel expects economic growth to turn positive in the second half of this year, with the pace of job losses narrowing sharply over the remainder of this year and employment turning up in early 2010,” NABE President Chris Varvares said. Nearly three out of four of the panel’s economists said they expected the recession would end by the third quarter.

But some economists think President Obama’s stimulus plan has had little if anything to do with the economy’s new signs of life, that a lot of the heavy lifting in the recovery is a result of actions taken by the Federal Reserve, and that once the recession ends, the remaining funds, estimated to be in the hundreds of billions of dollars next year, should be returned to the U.S. Treasury.

U.S. Seeks Expanded Power to Seize Firms

I don’t get it.  The Treasury secretary can’t find people to fill positions in the Treasury department but he is ready to take on seizing private businesses now?  What is going on? Are they that hungry for power that they are going to take advantage of the financial failures to grab it?  Welcome to the United Soviet of America!  The scary thing about this, is that congress could roll over and give them what they want. Don’t they have enough problems with AIG as it is? Wake up people, you are going to start caring when it is too late!


By Binyamin Appelbaum and David Cho

Washington Post Staff Writers

Tuesday, March 24, 2009; A01

The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document.

The government at present has the authority to seize only banks.

Giving the Treasury secretary authority over a broader range of companies would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators, according to the document.

The administration plans to send legislation to Capitol Hill this week. Sources cautioned that the details, including the Treasury’s role, are still in flux.

Treasury Secretary Timothy F. Geithner is set to argue for the new powers at a hearing today on Capitol Hill about the furor over bonuses paid to executives at American International Group, which the government has propped up with about $180 billion in federal aid. Administration officials have said that the proposed authority would have allowed them to seize AIG last fall and wind down its operations at less cost to taxpayers.

The administration’s proposal contains two pieces. First, it would empower a government agency to take on the new role of systemic risk regulator with broad oversight of any and all financial firms whose failure could disrupt the broader economy. The Federal Reserve is widely considered to be the leading candidate for this assignment. But some critics warn that this could conflict with the Fed’s other responsibilities, particularly its control over monetary policy.

The government also would assume the authority to seize such firms if they totter toward failure.

Besides seizing a company outright, the document states, the Treasury Secretary could use a range of tools to prevent its collapse, such as guaranteeing losses, buying assets or taking a partial ownership stake. Such authority also would allow the government to break contracts, such as the agreements to pay $165 million in bonuses to employees of AIG’s most troubled unit.

The Treasury secretary could act only after consulting with the president and getting a recommendation from two-thirds of the Federal Reserve Board, according to the plan.

Geithner plans to lay out the administration’s broader strategy for overhauling financial regulation at another hearing on Thursday.

The authority to seize non-bank financial firms has emerged as a priority for the administration after the failure…

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via U.S. Seeks Expanded Power to Seize Firms.

The Money Masters – How International Bankers Gained Control of America

This is long but informative.

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