Bernanke: Juice the economy 'quickly'

Spencer Collins · #1 (**permalink**) 01-17-2008, 02:41 PM

Bernanke: Juice the economy 'quickly'

Fed chairman, urging lawmakers to boost consumer spending within 12 months, tags mortgage meltdown's cost at $100 billion or more.

By Paul R. La Monica, CNNMoney.com editor at large
January 17 2008: 12:56 PM EST

NEW YORK (CNNMoney.com) -- Federal Reserve Chairman Ben Bernanke told Congress Thursday that legislators should enact a fiscal stimulus package in order to help beleaguered consumers as recession fears grow.

The comments by Bernanke, who testified before the House Budget Committee, came as a cascade of more bad news about the housing, financial and manufacturing sectors stoked calls for decisive action.

"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 twelve months or so," Bernanke said.

Some economists have suggested that the economy is heading into a recession or may already be in one. Stocks have plummeted this year, and big banks Citigroup (C, Fortune 500) and Merrill Lynch (MER, Fortune 500) reported huge quarterly losses this week resulting from bad mortgage investments.

Bernanke said that current losses from the subprime mortgage mess were probably about $100 billion but cautioned that this figure could wind up being higher.

More?

Bernanke supports stimulus package - Jan. 17, 2008

This may be too little too late,time will tell.

MountainMike · #2 (**permalink**) 01-17-2008, 04:18 PM

Why I am wary of quick fixes:

1. Are we bailing out the loan sharks responsible for giving those unsecured loans trying to lure people into high interest payments?

Since the Great Depression was basically caused by "speculation" and the Fed was established to allegedly prevent another Great Depression, why is it too much to ask for the intervention directly when speculation becomes a problem.

2. I am against anything that might devalue the dollar further. People on fixed retirement incomes are the first to suffer.

3. Invariably, this means taxpayers are bailing out Freddy Mac and Fanny Mae yet again. It's time for congress to reconsider these half government half private agencies. Their track record has been horrific.

cnredd · #3 (**permalink**) 01-17-2008, 06:11 PM

Quote:

"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 twelve months or so," Bernanke said.

Let me rephrase...

Quote:

To be useful, a fiscal stimulus package should be implemented quickly and structured so that banks and consumers will find out there's no personal responsibility, and the government will come running at the first chance to use taxpayer money (much of it from people who were NOT complete morons in the mortgage field), and bail the idiots out who can't make smarter decisions for themselves.

saltwn · #4 (**permalink**) 01-18-2008, 05:43 PM

Tax rebates could boost economy quickly - Yahoo! News

Here it comes..

Quote:

Bush has gone down the tax rebate road before. Back in 2001, he added refunds of up to $300 per individual and $600 per household as a recession-fighting element of the tax cut plan that had been the centerpiece of his 2000 campaign.

The administration is examining boosting those amounts this time around to up to $800 for individual taxpayers and $1,600 for families.

Quote:

Democrats would like to tilt the relief to the poor and lower income taxpayers by adding an increase in unemployment benefits, doubling the normal 26 weeks that a jobless worker can collect benefits, and by also boosting food stamp payments.

Quote:

Bush started this year saying he did not know whether a stimulus plan was needed and if it was, he wanted to make sure that Congress made his first-term tax cuts permanent.

But the deteriorating economic situation has now convinced him of the need to offer a stimulus package. Democrats are letting it be known that if Bush is serious about moving quickly, he will need to delink the proposal from his drive to make his tax cuts permanent.

The betting is that he will do so and that Democrats and Republicans, with their eye on the November elections, will strike a deal.

"For this to keep us out of a recession, it has to be passed by Congress quickly and I think they can do it," said David Wyss, chief economist at Standard & Poor's in New York. "If you are a lawmaker, are you going to vote against giving your constituents a check for several hundred bucks?"

My question is, "Why increase food stamps?" Are the people on them going to eat more because there is a recession?

crazyflamingos · #5 (**permalink**) 01-18-2008, 06:07 PM

Quote:

Originally Posted by saltwn

[My question is, "Why increase food stamps?" Are the people on them going to eat more because there is a recession?

No. But food prices are going up because of transportation costs. And if one is among the working poor, it is entirely possible that the part of the food bill that has come from cash rather than food stamps is now going for gas to get to work.

Even if this is not the case, the increased spending at grocery stores will boost the economy in the same way that the cash rebate will. (Assuming that you accept the premise that the rebate will stimulate the economy.)

saltwn · #6 (**permalink**) 01-18-2008, 07:35 PM

Quote:

Originally Posted by crazyflamingos

No. But food prices are going up because of transportation costs. And if one is among the working poor, it is entirely possible that the part of the food bill that has come from cash rather than food stamps is now going for gas to get to work.

Even if this is not the case, the increased spending at grocery stores will boost the economy in the same way that the cash rebate will. (Assuming that you accept the premise that the rebate will stimulate the economy.)

Who I was thinking of was the "non working poor" who are on welfare and HUD and aren't looking for a job.
More stamps to buy more twinkies which might just be the reason they can't get a job in the first place. Get up at noon, eat, attend a necessary "job" class, sell some food stamps to by alcohol or drugs, eat an enormous dinner, be sure and invite all your friends. Hey what the heck-someone else is footing that bill, right?

crazyflamingos · #7 (**permalink**) 01-18-2008, 08:33 PM

Quote:

Originally Posted by saltwn

Who I was thinking of was the "non working poor" who are on welfare and HUD and aren't looking for a job.
More stamps to buy more twinkies which might just be the reason they can't get a job in the first place. Get up at noon, eat, attend a necessary "job" class, sell some food stamps to by alcohol or drugs, eat an enormous dinner, be sure and invite all your friends. Hey what the heck-someone else is footing that bill, right?

I don't know where you live but where I live the "non-working" poor who are satisfied with being on welfare and are neither disabled nor elderly appear to represent an extremely small fraction of those drawing food stamps.

Ergo I don't think about them much.

saltwn · #8 (**permalink**) 01-18-2008, 08:39 PM

Quote:

Originally Posted by crazyflamingos

I don't know where you live but where I live the "non-working" poor who are satisfied with being on welfare and are neither disabled nor elderly appear to represent an extremely small fraction of those drawing food stamps.

Ergo I don't think about them much.

Oregon

Spencer Collins · #9 (**permalink**) 01-18-2008, 11:49 PM

Tax rebates: Where's your check

Update

Lawmakers are still working out final details on cutting checks to all Americans to fight recession.

By Jeanne Sahadi, CNNMoney.com senior writer
January 18 2008: 5:42 PM EST

NEW YORK (CNNMoney.com) -- Consumers fuel the economy and if they're strapped, the thinking goes, better get them some cash to spend.

The biggest component of any government plan to jump-start the economy is expected to be issuing tax rebate checks - both Republicans and Democrats are pushing the idea of sending out checks for several hundred dollars if not more.

But their effectiveness is debated, and it could be summer before Americans see any real cash.

In a statement on the economy delivered Friday morning, President Bush said any plan should feature "direct and rapid income tax relief" to boost consumer spending. "Letting Americans keep more of their own money should increase consumer spending, and lift our economy at a time when people otherwise might spend less."

As of Friday morning, there was little expectation that a deal would be finalized before Tuesday when Congressional leaders are expected to meet with President Bush.

Whatever the final decision, here's how a rebate would work, when you're likely to get a check and how it might affect the economy.

When
Once a rebate is decided on, the IRS could start mailing out checks by the end of June since the agency is now in the middle of the 2007 tax-filing season, said Jason Furman, a senior fellow at the Brookings Institution. The IRS, however, is not yet commenting on the matter since negotiations about the rebate are still under way.

The goal, however, for both Democrats and Republicans is to get the money into the hands of consumers as soon as possible.

In a briefing after the president's statement, Treasury Secretary Henry Paulson said, "If (tax relief) is broad-based and simple, I believe we'll be able to get it out quickly and in time to make a difference this year."

On Friday afternoon, House Financial Services Chairman Barney Frank (D-Mass.) told CNN he believed lawmakers could pass a stimulus package, including a rebate, by March 1.

How much

Right now, President Bush is said to want an income tax rebate that would be generated by eliminating the 10 percent tax bracket, which applies to roughly the first $8,000 of income for single filers and the first $16,000 of income for married couples filing jointly.

More?

Tax rebates: Where's your check - Jan. 18, 2008

So there you have it..well,sort of,it's always nice to get some of your own money back...

saltwn · #10 (**permalink**) 01-19-2008, 01:59 AM

Quote:

Originally Posted by Spencer Collins

Tax rebates: Where's your check

Update

Lawmakers are still working out final details on cutting checks to all Americans to fight recession.

By Jeanne Sahadi, CNNMoney.com senior writer
January 18 2008: 5:42 PM EST

NEW YORK (CNNMoney.com) -- Consumers fuel the economy and if they're strapped, the thinking goes, better get them some cash to spend.

The biggest component of any government plan to jump-start the economy is expected to be issuing tax rebate checks - both Republicans and Democrats are pushing the idea of sending out checks for several hundred dollars if not more.

But their effectiveness is debated, and it could be summer before Americans see any real cash.

In a statement on the economy delivered Friday morning, President Bush said any plan should feature "direct and rapid income tax relief" to boost consumer spending. "Letting Americans keep more of their own money should increase consumer spending, and lift our economy at a time when people otherwise might spend less."

As of Friday morning, there was little expectation that a deal would be finalized before Tuesday when Congressional leaders are expected to meet with President Bush.

Whatever the final decision, here's how a rebate would work, when you're likely to get a check and how it might affect the economy.

When
Once a rebate is decided on, the IRS could start mailing out checks by the end of June since the agency is now in the middle of the 2007 tax-filing season, said Jason Furman, a senior fellow at the Brookings Institution. The IRS, however, is not yet commenting on the matter since negotiations about the rebate are still under way.

The goal, however, for both Democrats and Republicans is to get the money into the hands of consumers as soon as possible.

In a briefing after the president's statement, Treasury Secretary Henry Paulson said, "If (tax relief) is broad-based and simple, I believe we'll be able to get it out quickly and in time to make a difference this year."

On Friday afternoon, House Financial Services Chairman Barney Frank (D-Mass.) told CNN he believed lawmakers could pass a stimulus package, including a rebate, by March 1.

How much

Right now, President Bush is said to want an income tax rebate that would be generated by eliminating the 10 percent tax bracket, which applies to roughly the first $8,000 of income for single filers and the first $16,000 of income for married couples filing jointly.

More?

Tax rebates: Where's your check - Jan. 18, 2008

So there you have it..well,sort of,it's always nice to get some of your own money back...

I got a little check from Oregon cause they said we were under budget. Wasn't much, but it was something!
One estimate put the fed rebate thats being considered at 800 dollars/person, 1600 per family. I'll take it if I can get it!

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