Submitted by IceCreamYou on Fri, 12/19/2008 - 12:35pm
News on the economy has been both good and bad this week--but mostly good as we find out about plans to move the economy forward. From the incoming Obama administration to Congress to the Fed and even to Bush, everyone is working to keep us all afloat. The verdict: life may look tough for some right now, but it's promising to improve. Read on to learn this week's developments.
Following news that consumer prices have dropped the most since 1932, the Fed cut its key interest rate to almost zero in an unprecedented move that brought some limited confidence back. Most analysts say that it will keep the market from falling lower than it is, but that other actions are necessary to bring it back up. In related news, Goldman Sachs posted its first quarterly loss since it went public nine years ago, but the loss was much lower than expected; and the American public mood has dropped due primarily to fear of losing jobs.
In other economic news, many of you will wince to hear that OPEC has greatly cut its production in an attempt to bring gas prices back up. Though you probably won't be seeing gas under $2/gal as it is in many parts of the country right now, experts predict that it won't go too much higher because demand is decreasing due to the recession.
On the bright side, Obama is planning another massive stimulus plan, this time of up to $850 billion; and Democrats are planning their own infrastructure-based $600 billion bill. Both will have significantly more oversight than the last one. Most analysts consider this good news, although fiscal conservatives oppose spending the money when the government debt is already so high. Similarly, Obama has promised to improve financial regulation; and Bush has dedicated at least $13.4 billion to bailing out automakers, with $4 billion more possible in February. Also, new record low morgage rates have "tossed housing a lifeline."
Fri, 12/19/2008 - 3:09pm
#2
so you think all this money is going to help? How long will it take?
I don't know, but I will say that it's more complicated than when the money will do its job. These programs are supposed to go into effect over the next two years, I'd say we might be out of a recession in two years but not all the way out of the hole. But there's also the problem that the money has to come from somewhere, and after the economy recovers it will have to take the extra burden of paying back the countries we borrow the money from.
Fri, 12/19/2008 - 4:45pm
#3
so you think all this money is going to help? How long will it take?
Nobody knows, really, but my best guess is pretty close to Cheeto's.
Sat, 12/20/2008 - 1:08pm
#4
obama is backing bush's auto bailout (source) and he is focusing on domestic issues (source) but the bailout probably wont help much (source) and the uaw isnt budging any
bush says its the only way to avoid collapse (source) but i dont think bankruptcy would be bad waht do you guys think?
anyway canada is bailing out their auto companies to (source)
Sat, 12/20/2008 - 7:32pm
#5
Bankruptcy would allow the companies to renegotiate their debt and contracts, which really needs to happen. There really aren't any downsides that I can see that would be any worse than what will happen without bankruptcy, since it looks pretty impossible at this point for the companies to turn themselves around.
Sat, 12/20/2008 - 8:54pm
#6
mainly bankruptcy would require unions to give up their too-sweet contracts and CEOs to lose their too-sweet paychecks.
a reminder that it's not just the US that's flailing around (or Canada, which TheOne pointed out): it's also countries all over the globe, from Japan to Belgium.
http://news.yahoo.com/s/nm/20081220/ts_nm/us_financial
so you think all this money is going to help? How long will it take?