By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer –
WASHINGTON – With signs the economy is improving but still fragile, Federal Reserve policymakers are considering whether some programs intended to drive down rates on mortgages and other consumer debt should be slowed down.
Most economists predict that Fed Chairman Ben Bernanke and his colleagues, who resumed meeting Wednesday morning, won't launch any bold new efforts at the end of their two-day gathering.
Fears have grown on Wall Street that the Fed's radical efforts to lift the country out of the longest recession since World War II could ignite inflation later on.
"Injecting additional money into the banking system is a pretty dangerous game right now, and the Fed cannot afford to press on the accelerator amid a potentially inflationary environment," said Richard Yamarone, economist at Argus Research.
Wanting to snuff out any rise in inflation expectations, the Fed could opt to tweak its already-announced programs to slow down purchases of either government debt or mortgage-backed securities. Doing so also could help avert possible market disruptions and make it easier for the Fed to reel in these programs once the economy rebounds.
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Showing posts with label federal bailout. Show all posts
Showing posts with label federal bailout. Show all posts
Wednesday, June 24, 2009
Wednesday, February 18, 2009
Fed downgrades economic forecast for this year
Associated Press
WASHINGTON: The Federal Reserve on Wednesday sharply downgraded its projections for the United States' economic performance this year, predicting the economy will actually shrink and unemployment will rise higher.
Under the new projections, the unemployment rate will rise to between 8.5 and 8.8 percent this year. The old forecasts, issued in mid-November, predicted the jobless rate would rise to between 7.1 and 7.6 percent.
The Fed also believes the economy will contract this year between 0.5 and 1.3 percent. The old forecast said the economy could shrink by 0.2 percent or expand by 1.1 percent.
The last time the economy registered a contraction for a full year was in 1991, by 0.2 percent. If the Fed's new predictions prove correct, it would mark the weakest showing since a 1.9 percent drop in 1982, when the U.S. had suffered through a severe recession.
The bleaker outlook represents the growing toll of the worst housing, credit and financial crises since the 1930s. All of those negative forces have plunged the nation into a recession, now in its second year.
"Given the strength of the forces currently weighing on the economy," Fed officials "generally expected that the recovery would be unusually gradual and prolonged," according to documents on the Fed's updated economic outlook.
Against that backdrop, unemployment — now at 7.6 percent, the highest in more than 16 years — will keep climbing and stay elevated for quite some time, the Fed predicted.
Fed officials anticipated that unemployment would remain "substantially" higher than normal at the end of 2011 "even absent further economic shocks."
The Fed forecast calls for the jobless rate to dip to between 8 and 8.3 percent next year, and to between 7.5 and 6.7 percent in 2011. All those projections are worse than the Fed's previous estimates and would put unemployment higher than the normal range around 5 percent.
Employment is usually the last piece of the economy to heal once the country is out of recession and in recovery mode. Businesses are usually reluctant to ramp up hiring until they feel confident that any recovery has staying power.
Under the Fed's new projections, the economy should grow between 2.5 and 3.3 percent next year. Fed officials "generally expected that strains in financial markets would ebb only slowly and hence that the pace of recovery in 2010 would be damped," according to the Fed documents.
Fed officials, however, predicted the economy would pick up speed in 2011, growing by as much as 5 percent, which would be considered robust.
Still, given all the economy's problems, there are risks that the Fed's forecasts could turn out to be too optimistic.
And a few Fed officials — none are identified — feared that it could take five or six years for the economy and employment to get back into a sustainable mode of health.
On the inflation front, the weak economy should mean that companies will keep a lid on price increases this year as they try to lure skittish consumers.
The Fed expects prices to rise between 0.3 and 1 percent this year, down from a projection of between 1.3 and 2 percent in the fall. Prices will pick up slightly in 2010 and 2011 as the economy strengthens.
For now, Fed officials are more worried about falling prices, than rising ones.
The Fed didn't use the word "deflation," which is a dangerous bout of falling prices, but officials noted "some risk of a protracted period of excessively low inflation."
Falling prices sound like a gift at first — at least to consumers. But a widespread and prolonged decline can wreak more havoc on the economy, dragging down Americans' wages, and clobbering already-stricken home and stock prices. Dropping prices already are hurting businesses' profits, forcing them to slice capital investments and lay off workers.
America's last serious case of deflation was during the Great Depression in the 1930s. Japan was gripped with a period of deflation during the 1990s, and it took a decade for that country to overcome those problems.
WASHINGTON: The Federal Reserve on Wednesday sharply downgraded its projections for the United States' economic performance this year, predicting the economy will actually shrink and unemployment will rise higher.
Under the new projections, the unemployment rate will rise to between 8.5 and 8.8 percent this year. The old forecasts, issued in mid-November, predicted the jobless rate would rise to between 7.1 and 7.6 percent.
The Fed also believes the economy will contract this year between 0.5 and 1.3 percent. The old forecast said the economy could shrink by 0.2 percent or expand by 1.1 percent.
The last time the economy registered a contraction for a full year was in 1991, by 0.2 percent. If the Fed's new predictions prove correct, it would mark the weakest showing since a 1.9 percent drop in 1982, when the U.S. had suffered through a severe recession.
The bleaker outlook represents the growing toll of the worst housing, credit and financial crises since the 1930s. All of those negative forces have plunged the nation into a recession, now in its second year.
"Given the strength of the forces currently weighing on the economy," Fed officials "generally expected that the recovery would be unusually gradual and prolonged," according to documents on the Fed's updated economic outlook.
Against that backdrop, unemployment — now at 7.6 percent, the highest in more than 16 years — will keep climbing and stay elevated for quite some time, the Fed predicted.
Fed officials anticipated that unemployment would remain "substantially" higher than normal at the end of 2011 "even absent further economic shocks."
The Fed forecast calls for the jobless rate to dip to between 8 and 8.3 percent next year, and to between 7.5 and 6.7 percent in 2011. All those projections are worse than the Fed's previous estimates and would put unemployment higher than the normal range around 5 percent.
Employment is usually the last piece of the economy to heal once the country is out of recession and in recovery mode. Businesses are usually reluctant to ramp up hiring until they feel confident that any recovery has staying power.
Under the Fed's new projections, the economy should grow between 2.5 and 3.3 percent next year. Fed officials "generally expected that strains in financial markets would ebb only slowly and hence that the pace of recovery in 2010 would be damped," according to the Fed documents.
Fed officials, however, predicted the economy would pick up speed in 2011, growing by as much as 5 percent, which would be considered robust.
Still, given all the economy's problems, there are risks that the Fed's forecasts could turn out to be too optimistic.
And a few Fed officials — none are identified — feared that it could take five or six years for the economy and employment to get back into a sustainable mode of health.
On the inflation front, the weak economy should mean that companies will keep a lid on price increases this year as they try to lure skittish consumers.
The Fed expects prices to rise between 0.3 and 1 percent this year, down from a projection of between 1.3 and 2 percent in the fall. Prices will pick up slightly in 2010 and 2011 as the economy strengthens.
For now, Fed officials are more worried about falling prices, than rising ones.
The Fed didn't use the word "deflation," which is a dangerous bout of falling prices, but officials noted "some risk of a protracted period of excessively low inflation."
Falling prices sound like a gift at first — at least to consumers. But a widespread and prolonged decline can wreak more havoc on the economy, dragging down Americans' wages, and clobbering already-stricken home and stock prices. Dropping prices already are hurting businesses' profits, forcing them to slice capital investments and lay off workers.
America's last serious case of deflation was during the Great Depression in the 1930s. Japan was gripped with a period of deflation during the 1990s, and it took a decade for that country to overcome those problems.
Thursday, January 29, 2009
Obama Administration Pushing "Stimulus" Plan With Excessive Pork Spending
Why is the "Stimulus Package" being so scrutinized?
When the TARP (700 billion dollars) was so unregulated and spent so frivolously, why wouldn't there be closer scrutiny.
"The House measure had been estimated to cost $825 billion, but the Congressional Budget Office updated the bill's price tag to $816 billion after accountants recalculated the cost. That total rose by $3 billion when the House approved on a voice vote a Democratic amendment for mass transit." -- TimesOnLine.co.UK.
With interest, the spending/stimulus plan with be approximately 1 Trillion dollars. How many zeros are in a trillion? 12 zeros!
On Obama's election campaign site, as of January 1, 2009, the following is what he said that the plan would go toward.
"Barack Obama's Plan to Stimulate the Economy and Protect American Families Would:
* Provide an immediate $250 tax cut for workers and their families.
* Provide an immediate, temporary $250 bonus to seniors in their Social Security checks.
* Provide an additional $250 tax cut to workers and an additional $250 to seniors if the economy continues to worsen
* Provide relief to homeowners hit by the housing crisis.
* Provide aid to states hardest-hit by the housing crisis to avoid a slash in services.
* Extend and expand Unemployment Insurance."
With benefits unlisted on the Internet (as far as my research as taken me), those items that have been leaked in the larger media outlets include those that may go to Acorn, NASA climate change research, digital TV converter box coupons, and more. The spending on sod on the National Mall has been reportedly removed, as well as the spending on contraception.
Forwarded from a friend...
When the TARP (700 billion dollars) was so unregulated and spent so frivolously, why wouldn't there be closer scrutiny.
"The House measure had been estimated to cost $825 billion, but the Congressional Budget Office updated the bill's price tag to $816 billion after accountants recalculated the cost. That total rose by $3 billion when the House approved on a voice vote a Democratic amendment for mass transit." -- TimesOnLine.co.UK.
With interest, the spending/stimulus plan with be approximately 1 Trillion dollars. How many zeros are in a trillion? 12 zeros!
On Obama's election campaign site, as of January 1, 2009, the following is what he said that the plan would go toward.
"Barack Obama's Plan to Stimulate the Economy and Protect American Families Would:
* Provide an immediate $250 tax cut for workers and their families.
* Provide an immediate, temporary $250 bonus to seniors in their Social Security checks.
* Provide an additional $250 tax cut to workers and an additional $250 to seniors if the economy continues to worsen
* Provide relief to homeowners hit by the housing crisis.
* Provide aid to states hardest-hit by the housing crisis to avoid a slash in services.
* Extend and expand Unemployment Insurance."
With benefits unlisted on the Internet (as far as my research as taken me), those items that have been leaked in the larger media outlets include those that may go to Acorn, NASA climate change research, digital TV converter box coupons, and more. The spending on sod on the National Mall has been reportedly removed, as well as the spending on contraception.
Forwarded from a friend...
"This year, taxpayers will receive an Economic Stimulus Payment.
This is a very exciting new program that I will explain using the Q and
A format:
Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.
Q. Where will the government get this money?
A. From taxpayers.
Q. So the government is giving me back my own money?
A. Only a smidgen.
Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a high-definition
TV set, thus stimulating the economy.
Q. But isn't that stimulating the economy of China?
A. Shut up.
Below is some helpful advice on how to best help the US economy by
spending your stimulus check wisely:
If you spend that money at Wal-Mart, all the money will go to China.
If you spend it on gasoline it will go to the Arabs.
If you purchase a computer it will go to India.
If you purchase fruit and vegetables it will go to Mexico, Honduras, and
Guatemala (unless you buy organic).
If you buy a car it will go to Japan.
If you purchase useless crap it will go to Taiwan.
And none of it will help the American economy.
We need to keep that money here in America. You can keep the money in
America by spending it at yard sales, going to a baseball game, or spend
it on prostitutes, beer (domestic ONLY), or tattoos, since those are the
only businesses still in the US."
Tuesday, January 27, 2009
Friday, December 12, 2008
Is the Auto Bailout Consitutional?
Is the auto bailout, or any other Federal bailout constitutional?
Ron Paul regarding the auto bailout. "If one were to look for guidance in the constitution, there's no evidence that we have the authority to take funds from one group of Americans and transfer it to another group who happen to need something."
Obama on the constitution. The U.S. Consitution had deep flaws that continue today.
Obama. The U.S. Constitution does not address the redistribution of wealth and what the Federal Government can do on your behalf. He says that it's a tragedy the constitution wasn't radically reinterpreted to force redistribution of wealth for African Americans and that it is still and issue today.
We see that the redistribution of wealth is currently under way with the bailouts, regardless of the stalled status of the auto bailout. Eventually, even if it is following Bush leaving the White House, the bailout will happen for a plethora of other industries based on what Obama has stated in the past and on the Democratic leadership in Washington D.C.. Notice the change from capitalism that is currently underway. Capitalism is deteriorating. The more the government is involved, the less freedom we have, the less motivation we have, the less capitalism we have. Socialism is not America. We are on the road to nationalization.
If some specific companies get special treatment through a bailout, won't it make the playing field uneven?
Are these bailouts constitional? Is there going to be an end to these bailouts? These are issues that need to be addressed since our American tax dollars are funding these "bailouts". Transparency is the answer. Transparency will likely never happen.
Ron Paul regarding the auto bailout. "If one were to look for guidance in the constitution, there's no evidence that we have the authority to take funds from one group of Americans and transfer it to another group who happen to need something."
Obama on the constitution. The U.S. Consitution had deep flaws that continue today.
Obama. The U.S. Constitution does not address the redistribution of wealth and what the Federal Government can do on your behalf. He says that it's a tragedy the constitution wasn't radically reinterpreted to force redistribution of wealth for African Americans and that it is still and issue today.
We see that the redistribution of wealth is currently under way with the bailouts, regardless of the stalled status of the auto bailout. Eventually, even if it is following Bush leaving the White House, the bailout will happen for a plethora of other industries based on what Obama has stated in the past and on the Democratic leadership in Washington D.C.. Notice the change from capitalism that is currently underway. Capitalism is deteriorating. The more the government is involved, the less freedom we have, the less motivation we have, the less capitalism we have. Socialism is not America. We are on the road to nationalization.
If some specific companies get special treatment through a bailout, won't it make the playing field uneven?
Are these bailouts constitional? Is there going to be an end to these bailouts? These are issues that need to be addressed since our American tax dollars are funding these "bailouts". Transparency is the answer. Transparency will likely never happen.
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