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Socks · 01-17-2008, 10:08 AM

I don't get it, they want consumers to spend more? Isn't the average consumer in a world of bad credit card debt already, not to mention mortgaged twice, credit lines, loans?

The fed's answer is to just get the consumers to take on some... more debt?

Esplain lucy?

http://money.cnn.com/2008/01/17/news...ex.htm?cnn=yes

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.

Former Treasury Secretary Larry Summers told lawmakers on Tuesday that Congress should immediately consider a stimulus package of $50 billion to $75 billion through a combination of tax cuts and increased spending on unemployment benefits and other programs. He also advocated that another $50 billion to $75 billion be set aside in case economic conditions weaken further.

A spokesman for President Bush said Thursday that the White House also supports a short-term stimulus package.

Bernanke cautioned though that any stimulus "should be explicitly temporary" in order "to avoid unwanted stimulus beyond the near-term horizon and, importantly, to preclude an increase in the federal government's structural budget deficit."

01-17-2008, 10:08 AM
Socks Confirmed User Industry Role: Join Date: May 2002 Location: Toronto Posts: 8,475	US Fed Chairman Bernanke: Juice the economy 'quickly' I don't get it, they want consumers to spend more? Isn't the average consumer in a world of bad credit card debt already, not to mention mortgaged twice, credit lines, loans? The fed's answer is to just get the consumers to take on some... more debt? Esplain lucy? http://money.cnn.com/2008/01/17/news...ex.htm?cnn=yes 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. Former Treasury Secretary Larry Summers told lawmakers on Tuesday that Congress should immediately consider a stimulus package of $50 billion to $75 billion through a combination of tax cuts and increased spending on unemployment benefits and other programs. He also advocated that another $50 billion to $75 billion be set aside in case economic conditions weaken further. A spokesman for President Bush said Thursday that the White House also supports a short-term stimulus package. Bernanke cautioned though that any stimulus "should be explicitly temporary" in order "to avoid unwanted stimulus beyond the near-term horizon and, importantly, to preclude an increase in the federal government's structural budget deficit."