S
Smart American
Guest
Yup, they want youto beleive the world is flat and the tooth fairy is
real.
Aint it a hoot? Hee Hee!
WEEEEEEE!!!!!!!!!!!!!!
Larry Summers, the former US Treasury secretary, on Wednesday called
for a fiscal stimulus of up to $75bn to support the US economy, as
fellow Democrat Chuck Schumer launched a scathing attack on the Bush
administration's handling of the subprime crisis.
Mr Summers said the stimulus was necessary to offset the mounting risk
of recession. He warned that, without timely action, the average US
family could lose up to $5,000 in income, the country could suffer
hundreds of thousands more home foreclosures and national debt could
significantly increase - "even in a mild recession".
EDITOR'S CHOICE
Economists' forum - Sep-06
Fifty of the world's leading economists discuss Martin Wolf and
Lawrence Summers' columns in a special forum
More from this columnist - Dec-26He dismissed suggestions by
Republican lawmakers that an extension of President George W. Bush's
tax cuts would provide an effective fiscal remedy. "Fiscal stimulus is
critical but could be counterproductive if it is not timely, targeted
and temporary," he said.
"The adverse consequences of policy choices that fail to deal with a
potential recession and fail to stimulate the economy far exceed
[those] of over-insuring against an economic downturn."
Full speech
The state of the US economy: Risks of recession, prospects for policy
Mr Summers' remarks were echoed by Mr Schumer, chairman of the Senate
finance committee, who warned that the US economy "teeters on the edge
of recession". He said the administration-sponsored plan to freeze
interest rates on some subprime loans was "too little, too late, and
too dependent on the voluntary goodwill of the private sector".
And he attacked the Federal Reserve's handling of mortgage regulation,
saying that it "has avoided grabbing the bull by the horns".
Mr Summers also appeared to fault the Fed, calling on the US central
bank to worry less about the risks of rising US inflation and focus
more aggressively on taking steps to ease the credit squeeze.
"It is much more important to establish credibility that policy is
ahead of the credit crunch spiral than to reassure yet again that it
is not behind the inflation curve," he said. "The most urgent priority
for policy over the next several months is containing the incipient
economic downturn. I am convinced this is possible without giving rise
to either excessive complacency in the future or accelerating
inflation."
Mr Summers reminded people that the Fed had a long history of
overstating inflation risks at the expense of economic growth. "For
most of the postwar period, economic expansions did not die of old
age. They were murdered by the Federal Reserve in the name of fighting
inflation."
In remarks at the same Brookings Institution event, Mr Schumer
attacked the administration's "rose-tinted" view of the US economic
outlook and claimed that Hank Paulson, the Treasury secretary, was
"ideologically shackled" by the White House from taking more proactive
steps to avert recession. Mr Paulson flatly rejects such suggestions.
"Because of the administration's unwillingness to act, we are
teetering on the brink of recession and this outcome could have been
avoided," he said.
Both sets of remarks add to the growing Democratic criticism of the
administration's alleged incompetence in economic management. But the
growing chances of a technical recession, which Mr Summers put at 40
per cent, are finding few echoes so far on the presidential campaign
trail.
Both Hillary Clinton and Barack Obama have attacked Mr Bush's
allegedly reckless fiscal record but have stopped short of predicting
the onset of a recession. On Tuesday, the Democratic-controlled
Congress passed a $933bn (EURO 649bn,
real.
Aint it a hoot? Hee Hee!
WEEEEEEE!!!!!!!!!!!!!!
Larry Summers, the former US Treasury secretary, on Wednesday called
for a fiscal stimulus of up to $75bn to support the US economy, as
fellow Democrat Chuck Schumer launched a scathing attack on the Bush
administration's handling of the subprime crisis.
Mr Summers said the stimulus was necessary to offset the mounting risk
of recession. He warned that, without timely action, the average US
family could lose up to $5,000 in income, the country could suffer
hundreds of thousands more home foreclosures and national debt could
significantly increase - "even in a mild recession".
EDITOR'S CHOICE
Economists' forum - Sep-06
Fifty of the world's leading economists discuss Martin Wolf and
Lawrence Summers' columns in a special forum
More from this columnist - Dec-26He dismissed suggestions by
Republican lawmakers that an extension of President George W. Bush's
tax cuts would provide an effective fiscal remedy. "Fiscal stimulus is
critical but could be counterproductive if it is not timely, targeted
and temporary," he said.
"The adverse consequences of policy choices that fail to deal with a
potential recession and fail to stimulate the economy far exceed
[those] of over-insuring against an economic downturn."
Full speech
The state of the US economy: Risks of recession, prospects for policy
Mr Summers' remarks were echoed by Mr Schumer, chairman of the Senate
finance committee, who warned that the US economy "teeters on the edge
of recession". He said the administration-sponsored plan to freeze
interest rates on some subprime loans was "too little, too late, and
too dependent on the voluntary goodwill of the private sector".
And he attacked the Federal Reserve's handling of mortgage regulation,
saying that it "has avoided grabbing the bull by the horns".
Mr Summers also appeared to fault the Fed, calling on the US central
bank to worry less about the risks of rising US inflation and focus
more aggressively on taking steps to ease the credit squeeze.
"It is much more important to establish credibility that policy is
ahead of the credit crunch spiral than to reassure yet again that it
is not behind the inflation curve," he said. "The most urgent priority
for policy over the next several months is containing the incipient
economic downturn. I am convinced this is possible without giving rise
to either excessive complacency in the future or accelerating
inflation."
Mr Summers reminded people that the Fed had a long history of
overstating inflation risks at the expense of economic growth. "For
most of the postwar period, economic expansions did not die of old
age. They were murdered by the Federal Reserve in the name of fighting
inflation."
In remarks at the same Brookings Institution event, Mr Schumer
attacked the administration's "rose-tinted" view of the US economic
outlook and claimed that Hank Paulson, the Treasury secretary, was
"ideologically shackled" by the White House from taking more proactive
steps to avert recession. Mr Paulson flatly rejects such suggestions.
"Because of the administration's unwillingness to act, we are
teetering on the brink of recession and this outcome could have been
avoided," he said.
Both sets of remarks add to the growing Democratic criticism of the
administration's alleged incompetence in economic management. But the
growing chances of a technical recession, which Mr Summers put at 40
per cent, are finding few echoes so far on the presidential campaign
trail.
Both Hillary Clinton and Barack Obama have attacked Mr Bush's
allegedly reckless fiscal record but have stopped short of predicting
the onset of a recession. On Tuesday, the Democratic-controlled
Congress passed a $933bn (EURO 649bn,
