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Obama's stimulus plan and state of the economy
In a previous article "Why Our Economy is Heading Into A Depression" I wrote at the beginning of February, I made the case for why I think the economy will worsen and enter into a depression based on numerous market indicators and opinions by economic experts. Almost three weeks later and after the recent passage of the heralded Obama $787 Billion Stimulus Plan, market news and experts continue to suggest the forthcoming of a depression. Here's an updated snapshot of the progress of our economy...
- What's in the stimulus package?
- Obama's stimulus package will fail
- Feds forecast worsening economy
- More grim economic news
WHATS IN THE STIMULUS PACKAGE?
Quick Overview:
$142 billion -- business tax cuts
$140 billion -- individual tax cuts
$120 billion -- infrastructure
$87 billion -- state Medicaid
$70 billion -- alternative minimum tax patch
$67 billion -- other aid to states
$60 billion -- help for jobless
$40 billion -- efficient energy projects
$37 billion -- other ("honeybee insurance," digital TV, NEA, etc.)
$19 billion -- healthcare information technology
$7 billion -- broadband access for rural areas
(Thanks to Sam Fong for these numbers.)
Spending and job creation by state
Nitty gritty details of entire package
Will the stimulus actually stimulate? Economists say no
"I think (doing) nothing would have been better," said Ed Yardeni, an investment analyst who's usually an optimist, in an interview with McClatchy. He argued that the plan fails to provide the right incentives to spur spending.
"It's unfocused. That is my problem. It is a lot of money for a lot of nickel-and- dime programs. I would have rather had a lot of money for (promoting purchase of) housing and autos . . . . Most of this plan is really, I think, aimed at stabilizing the situation and helping people get through the recession, rather than getting us out of the recession. They are actually providing less short-term stimulus by cutting back, from what I understand, some of the tax credits."
Obama’s Stimulus Not Enough to Avert Biggest GDP Drop Since 1946
FEDS FORECAST WORSENING ECONOMY
The central bank's balance sheet, its ledger of assets and liabilities, has ballooned from $800 billion to about $2 trillion in recent months as it has aggressively intervened in select credit markets.
Feds Forecasts Increasing Unemployment; No Recovery Until 2012 Earliest
The Federal Reserve sharply downgraded its outlook for the economy this year, forecasting a deeper contraction and an unemployment rate near 9% by the end of the year.
In projections released Wednesday, central bank policy makers effectively indicated that the sharp declines under way in the first half of the year would be only partially offset by any growth in the second half. Most officials also indicated that they don't expect unemployment to return to a normal rate of about 5% before 2012 at the earliest.
Bullish times and prospertiy during the past few years = "mirage"
The leap in wealth that Americans thought they were enjoying over the last several years has already turned out to be a mirage, according to new estimates by the Federal Reserve.
In its triennial survey of consumer finances, released Thursday, the Fed found that the median net worth of American households increased by a seemingly healthy 17 percent between the end of 2004 and the end of 2007.
But the gains were wiped out by the collapse in housing and stock prices last year. Adjusting for those declines, Fed officials estimated that the median family was 3.2 percent poorer as of October 2008 than it was at the end of 2004.The new survey offers one of the first glimpses of how American families were positioned financially as the roof fell in on the economy, and it provides some sense of how much wealth has been destroyed since then. Indeed, the destruction of wealth is still in full swing: housing prices are still falling, more than two years after the bubble peaked.
THE BIGGER PICTURE:
- Japan's Recession vs. U.S. Recession
- Sino-American Trade: The dollar-yuan link has been a great boon to world prosperity
- Obama's first 100 days
- Civil Engineers Say America's Infrastructure Fails
- Bill Gates: the Rich must help the Poor
MORE BAILOUTS:
- Housing Bailout at $275 billion
- Bank of America $20 billion bailout
- New TARP won't rescue banks
- GM and Chrysler beg for $21.6 billion more
MORE BANKRUPTCIES AND LOSSES:
- California on brink of bankruptcy
- The decline of California and how raising taxes won't fix it
- No one is immune – Trump Entertainment files Bankruptcy
- S&P heads to all time low in negative earnings
- Losses Mount on Credit Cards for Retailers
MORE GREEED AND CORRUPTION:
- First Enron, then Madoff… now Stanford International Bank's $8 Billion Fraud (link 1)
- First Enron, then Madoff… now Stanford International Bank's $8 Billion Fraud (link 2)
PERSONAL FINANCE:
- Using too much credit cards can hurt your credit score
- Inactive credit cards can hurt your credit score
TECHNOLOGY:
[...] for individuals with Bachelor's Degrees prior to the recession. And the economy is only going to get worse even with Obama's stimulus [...]