After months of confusion, we are about to close a painful chapter in the economic crisis of 2008-2009. With the imminent passage of the $800 billion stimulus package combined with the roll-out of the next stages of the government-orchestrated bank bailout and recapitalization, we are about to end the talking phase and enter the doing phase. While no one can say for sure whether these plans will work, it's certain that they will have an effect.
Many will debate the details endlessly, whether or not there is the right mix of spending and tax cuts, whether the plan to sequester and purchase "toxic assets" is aggressive enough and if the overall approach will serve to instill a modicum of confidence among hundreds of millions of consumers and hundreds of thousands of businesses that have little. But while the devil is sometimes in the details, this time perhaps not.
As Wall Street continues its slow-motion hari kari, tens of millions of people on the lower-end of the income spectrum are finding that their access to credit is becoming all but nonexistent. As banks set aside ever more cash to cover themselves against potential future losses, the credit spigot that flowed so promiscuously to riskier customers is now not flowing at all.
By Lindsay Beyerstein, The Media Consortium MediaWire blogger.
The $825 billion economic stimulus package is finally taking shape as House committees finalize their contributions to the bill. The good news is that healthcare spending will be a major part of the stimulus: $87 billion has been set aside to help states pay for Medicaid alone.
by Zach Carter, Media Consortium MediaWire Bloggger
Since the U.S. is officially in a recession, and the Congressional Budget Office has predicted the worst economic downturn since the Great Depression, just about everybody acknowledges that times are tough.
by Zach Carter, Media Consortium MediaWire blogger
In 2008, we witnessed the first serious fallout from deep structural flaws in the relationship between the nation's public and private sectors, a relationship which fell short in every conceivable area from Wall Street regulation to the basic social safety net. The biggest economic stories of 2009 will be about how President-elect Barack Obama's administration repairs-or fails to repair-that connection.
The first step in rebuilding a government that actually responds to problems before they reach the bailout stage will be Obama's highly anticipated economic recovery package. As Dean Baker notes for The Huffington Post, the failure to date of Congress to pass meaningful stimulus legislation has been beyond negligent. Several Congressional leaders are cautioning that a bill will not be ready until February, but with more than two weeks to go before Obama's inauguration, Congress has both the time and the public support necessary to pass a major bill before Obama takes up a chair in the Oval Office, as anyone who remembers the speed of Congressional action moved on the Wall Street bailout can attest.
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