Obama also would like to continue to provide tax incentives worth $38 billion this year for small business and middle-income families to continue to stimulate spending and investment. He defended the government bailouts because they were necessary and proposed to use $30 billion in TARP paybacks to assist community banks providing loans to small businesses.
Monday, February 1, 2010
Obama Vows to Press Health Care, Act to Boost Economy
President Obama reiterates the same agenda from his campaign where his main focus is to increase employment. There has been upwards of 7 million jobs lost since the beginning of the recession in 2007 and unemployment rates still remain high at 10% at the end of 2009.
Obama unveils $3.8 trillion budget
Today President Obama unveiled a $3.8 trillion budget for 2011 that will hopefully control the nation's deficit and boost our fragile economy through continued government spending. The budget is built on the assumption that the nation's unemployment rate will average 9.2% in 2011 and the nation's GDP grows by 3.8% next year. If Congress passes the budget, the deficit decrease from 10.6% to 8.3% and hopefully by 2014 it would drop drastically to 3.9%. Furthermore, good news for us students, $17 billion will be allocated to help students pay for college.
Sunday, January 31, 2010
Fed vows low rates for ‘extended period’
This article talks about why the Fed will continue to keep interest rates low. It says that although the economy has started recovering, it is doing so at a slow pace, hence it still has a long way to go. It also talks about how the Fed has to be carefull in pulling out the stimulus money without significantly affecting the economy.
Stimulus funds nearly 600,000 jobs last quarter
This article, by Tami Luhby, is about the large effect the stimulus package had on the U.S. economy. Overall, the stimulus raised employment from 1.5 to 2 million jobs, and this figure doesn't take into account the jobs created from people spending tax cuts and companies spending on supplies for stimulus projects. The problem, however, is that there are many errors in the study and many republicans question its validity.
http://money.cnn.com/2010/01/30/news/economy/stimulus_jobs/index.htm?cnn=yes&hpt=T2
Ticking Up
In the fourth quarter of last year American GDP grew by an impressive 5.7%, at an annual rate, the best quarterly performance since 2003. Expansion was driven by growth in private inventories and an increase in exports. This fourth quarter increase shows that the worse is over. However, there are reasons to doubt that the impressive performance in a single quarter will be repeated in the coming months. That brief buying spree brought some workers back to assembly lines, but unless a new source of demand arises the boost from restocking will fade and growth will slow. It is not clear where the new demand will come from.
Investment may also disappoint in 2010, because of overcapacity. Oversupply in both residential and commercial property has discouraged investment in the sectors and meant that construction employment is not rising. Nor does it help that government economic support will fade during 2010. Nonetheless, the performance of the American economy in the fourth quarter is encouraging, suggesting firmly that America has pulled free of recession. Yet caution is in order.
China Leading Global Race to Make Clean Energy
TIANJIN, China — China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines, and is poised to expand even further this year.
China has also leapfrogged the West in the last two years to emerge as the world’s largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants.
These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.
“Most of the energy equipment will carry a brass plate, ‘Made in China,’ ” said K. K. Chan, the chief executive of Nature Elements Capital, a private equity fund in Beijing that focuses on renewable energy.
President Obama, in his State of the Union speech last week, sounded an alarm that the United States was falling behind other countries, especially China, on energy. “I do not accept a future where the jobs and industries of tomorrow take root beyond our borders — and I know you don’t either,” he told Congress.
China has also leapfrogged the West in the last two years to emerge as the world’s largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants.
These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.
“Most of the energy equipment will carry a brass plate, ‘Made in China,’ ” said K. K. Chan, the chief executive of Nature Elements Capital, a private equity fund in Beijing that focuses on renewable energy.
President Obama, in his State of the Union speech last week, sounded an alarm that the United States was falling behind other countries, especially China, on energy. “I do not accept a future where the jobs and industries of tomorrow take root beyond our borders — and I know you don’t either,” he told Congress.
Formula shows why it's so hard to cut jobless rate
This article gives insight to the reason(s) why the unemployment rate is lagging so far behind economic recovery. I just thought it was interesting to think about.
Bail-Out Goals Still Not Met!
This BBC news article focuses on the bail-out plan that is supposedly still running it's course. While the US economy may be on a rise the main purposes of the $700 billion bailout have not yet been met. Bank lending is still prohibitively low and no measures have been put in place to stop, or at least prevent, future economic crises. However, I feel this article fails to acknowledge the proposed banking reform. Yes, the bail-out plan may not have worked yet but, the country is still coming out of the recession. It seems the author may be trying to insinuate that nothing will be done to reform and restructure the current economic systems. Thoughts?
Regulators shut down banks in 5 states
By MARCY GORDON, Jan 29 2010
This article explains the amount of bank failures since 2007 has been increasing, with the highest amount last year in 2009 with a total of 140 banks. In 2010 the number of bank failures thus far has reached 15, most recently in California, Georgia, Florida, Minnesota and Washington. The increase is due to the high amount of failed commercial and residential real estate loans, as well as the drop in housing prices and the rise in unemployment. Building developers have also begun to default on their loans as development projects fell short last year. It is believed that defaults on high risk loans could spike in 2010, and the amount of failing banks to be on the rise this year. So far the amount of bank failures has cost the Federal Deposit Insurance Corp $30 billion. The FDIC expects the total costs of saving banks to reach $100 billion over the next four years. In his State of the Union address, the President agreed to begin a $30 billion dollar program for community banks at low rates in exchange for increased lending to small businesses. This money would come from what is left of the $700 billion bailout fund.
This article explains the amount of bank failures since 2007 has been increasing, with the highest amount last year in 2009 with a total of 140 banks. In 2010 the number of bank failures thus far has reached 15, most recently in California, Georgia, Florida, Minnesota and Washington. The increase is due to the high amount of failed commercial and residential real estate loans, as well as the drop in housing prices and the rise in unemployment. Building developers have also begun to default on their loans as development projects fell short last year. It is believed that defaults on high risk loans could spike in 2010, and the amount of failing banks to be on the rise this year. So far the amount of bank failures has cost the Federal Deposit Insurance Corp $30 billion. The FDIC expects the total costs of saving banks to reach $100 billion over the next four years. In his State of the Union address, the President agreed to begin a $30 billion dollar program for community banks at low rates in exchange for increased lending to small businesses. This money would come from what is left of the $700 billion bailout fund.
A Needier Era
The 2010"s will be known as the age of scarcity for many people. In the 1990's, incomes were rising; capital markets were processing endless flows of money and investment; technological gains meant that ever more information was available ever more cheaply. But now as we move on to the new decade, the main problem for scarcity are water and food shortages. This could in fact have a direct impact on politics. The sort of problems governments increasingly face will be much less predictable than those associated with old great-power rivalries. It will be interesting to see how scarcity will play a role in politics for the next decade.
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