Friday, January 18, 2008

And Here is the Entry

It is a big deal with the national government begins to solve a problem the economy faces. Pres. Bush's father lost his election because he failed to recognize the looming economic crisis...clearly Bush II has learn an important lesson...

http://www.cnn.com/2008/POLITICS/01/18/bush.economy/index.html

BTW...I went to the grocery store to buy stuff for salad and dessert for a family dinner tonight. While I was there I picked up some spices to bring home...not to many and a bottle of wine to go with our BBQ (asado :). $79.00 later...I am still in shock and glad I never go the grocery store in the states! I will complain just a little less about the prices when I get back to Buenos Aires.

Can't wait to see you all (not really, I was just saying that to be nice :) Enjoy the last two weeks!

68 comments:

Tyler said...

The economy does need some sort of growth or stimulating package, but I'm not sure if Bush is allocating all the money to the right sectors-- but the article was somewhat vague about this. It is good to provide incentives for small businesses to make investments, because that usually ends up increasing efficiency and competition. But what it lacks is providing sufficient aid for low to middle income earners- the majority of US citizens, and the people who work and fuel the economy. For the economy to fully recover, growth packages like this one must include measures to extend unemployment benefits, according to a NY congressman. Also, the income tax cuts that Bush passed until 2010 should not become permanent- so much for a progressive tax system!

Hugo Doutre said...

An economic crisis is happening all over the world, and we have to admit it. Bush's plan is not the smartest nor will surely not be the most effective. 148 billion dollars in responce to the crisis is nothing and will not put the economy back on its feet. On January 21, it has been posted throughout the press around the world how markets declined in responce to Bush's plan. There is an article in "La nacion" that talks about the Asian stock markets reflecting an accumulating 12% loss. This has beem the worst commencement of a year in stock markets since 1990. The link is:
http://www.lanacion.com.ar/economia/nota.asp?nota_id=980656&pid=3852479&toi=5823

So it is clear that the world market´s are not approving a prosperous future, with Bush's plan. In my opinion, I think the EURO is going to be glad to the fall of the United States' economy, for the dollar is approaching a serious devaluation.

Hugo Doutre said...

This is the link:

http://www.lanacion.com.ar/980656

Prem M. Chattani said...

I agree with Hugo and Tyler... I was also going to post the La Nacion article, but well, Hugo was first. Anyways, you can still check the other La Nacion articles in my previous posts that show the follow up or build up all along. Yesterday, La Nacion as well as TN and many other media giants called the day "Black Monday". Stock markets worldwide were hit really badly. The MERVAL in Buenos Aires, Argentina got hit as well. This was all due to the uncertainty that is being caused by Bush's plan. Many don't deem it to be effective enough. People are getting nervous. From the little I have read about the package (given that many articles lack clarity on significant details) I have to say that this is not enough. Economics has that Foucault’s pendulum feeling to it. So really, many of the Keynesian methods can be followed, yet the economy will be different. Anyways, MERVAL was hit pretty badly and that is enough to prove what we have said all along about the relationship between the US’ economy and the world’s economies.

Hugo Doutre said...

...And now this Tuesday it has become worse, the press is calling it "Black Tuesday".

Hugo Doutre said...
This comment has been removed by the author.
Debora said...

Well well, the change in the US economy is certainly hitting the entire world :S:S. The effects can be severely felt already. I'm reading about US history right now cause of my history class hw and it explains how "Black Tuesday" of the Wall Street Crash occurred etc, and seeing economists label these last few days as "black monday" and "black tuesday" is really giving me the chills :S:S! So much has already been lost.

as hugo pointed out economies in asia have been hit pretty hard, and in the case of korea the WON has lost a lot of value, which was reflected in the increased won-dollar currency rate. this shows just how much we have been depending on the dollar and is an increased challenge to the korean economy, as the koreans voted their new president in the hopes that he would resurrect our economy and create growth(hes a businessman).

luckily though the US government is alarmed and has decided to take measures, deciding to lower their rates of interest which calmed matters down a bit. however the world market has proved to be very vulnerable with changes imposed by the US and its future still lies under an uncertain light :S sigh.

amy said...

It is interesting to see how the government has reacted so quickly to this downturn in the US economy. I think it's good that the Bush and congress are trying to target this economic issue thats been affecting the whole world, especially offering incentives to businesses because it may allow people to have more security. However, I agree with Tyler that this plan may not be targeting the right sectors, the sectors that have been and will be hit hardest if their is a significant economic recession.

I found an intersting article discussing how many people are skeptical about Bush's plan because they feel it benefits the wealthy. You can find the article: http://abcnews.go.com/Business/story?id=86479&page=1.

matt--- said...

Bushs plan may not be the greatest, and is hurting the global economy, but if the US economy isnt able to stabilize the world economy will keep weakining too. so it is good that Bush has attempted a plan it just might not be the most effective in fullfilling many needs like what amy said about the sectors of the economy that will get hit hardest... if their is a recession.

Lucas R. said...

Well I, for one, am supprised at the speed at which the government was able to stop fighting long enough to realize that we were actualley heading toward an economic problem. The big problem with this agrement is that it is a bi-partisan compromise, and that neither side truly achieved what they wanted. Not only is this going to leave us with furter arguments down the line, but now we're stuck with a plan that is too weak to stop the impending recession. I do not think that $300 is going to be enough to stimulate the slowing US economy. It seems to me that the package wasn't aimed at trying to relieve the sectors that have been hit by the slowing economy. $300 isn't giong to turn the fortine of a family in poverty around. It is meant to jumpstart the economy with spending money and to help calm consumers. I think that the problem they need to address is the lending/mortgage chrisis. The federal reserve needs to take further steps to alievaiting high intrest rates and the staggering amount of bank loss across the country (not to mention the little war we have going on raising oil prices). Lets hope some good will come out of this, otherwise the world will have a lot to deal with.

Bruno said...

i agree with matt, i think that what bush is doing isnt the best thing but its something. it is still weakinng the rest of the world as well as the states and this recesion is already being felt all around the world, dont you think so people? ok im going back to the beachhh cant wait to see you mrs stephens!!! (not really, i prefer the beach no offense)

Sofia said...

This plan may sound good, but I believe it will end up hurting the economy more than it will help it. This is just a short term boost to the economy, however it probably won't be big enough to make a better improvement, it will just keep it from falling into recession faster. Since there is a dispute to whom the package will aid, the chances of those in need, a.k.a low-income people actually receive money that will last and help them are slim. A negative aspect of this package is the effect it will have once it ends, once all the money has been used. What's going to happend to all those who depended on it? Will there be a significant shortage of money in the economy? Every economy goes up and down, and surely this one will too.

Santi Hossni said...

Ughhhh... school.. $%#@...
The article was pretty vague, and I have no clear idea of why the economy is going down, be it the consumer´s side buying less, or the oil prices, or the credit crunch. Time to get foreign consumers to buy houses and start exporting more goods than importing.

Ron Paul for president

Rebecca said...

Its funny how the government can act so slow when people are underwater like when hurricane katrina stuck but the second the economy is looking bad everyone runs to fix it...oh the greed. But yes, there's no doubt that the US economy is vitaly important to American citizens AND the entire world. Well, I'm glad that Bush is working to help the economy improve but I agree with the article in that the lower income families should be getting benefits and tax breaks, not just the businesses. I agree that the package will not give enough money for the people with a lower-income to greatly improve their conditions or spending, but every little cent that's going back into the economy counts. Hopefully it will help keep the worldwide economy afloat

Prem M. Chattani said...

Today The Federal Reserve cut short-term interest rates by .5%. This is the second cut in 8 days. Efforts are clearly being intensified to alleviate the fall towards a recession or even try to prevent it. There is an article on New York Times addressing this. It is interesting the reasons the Fed Reserve gives for the cut.

The link: http://www.nytimes.com/2008/01/30/business/30cnd-fed.html?_r=1&hp&oref=slogin

Carolina said...

The US citizens need a strong incentive to spend money as the government has realized. However, as some of you have already said the help is not being brought to the people who need it the most, those with a lower income and those who are unemployed. Although the article was not very specific, it seems that Bush is focusing more in small businesses. I think Bush shouldn’t make these benefits permanent as he has asked the Congress to. However, and as Sofia said, those who use this package now will have a though time when this temporary measure is over.

Mack f. said...

There is not much they can do to avoid the crisis at this moment. But what Bush does seems like a good plan. If the taxes lower it will mean that people and businesses have more money to spend. This will increase the spending and give a money insert to the economy. however there are more problems then just the lack of confidence that people have in the economy. The higher oil prices also play their part in this situation. This plan is only a part of a solution to an almost insolvable problem. Bush is taking the way of less government interference and a more free market. On the short term it will rise in consumer spending, but on the long term it will give more inequality. With this plan we will enter a crisis and it has probably already started

Jamie Ng said...

Well I think lowering tax rates is a good idea in improving the economy because consumers can use the money which was meant for tax to contribute to the economy. However, giving allowance to Americans do not help much because 300US is not enough to encourage consumers to spend like usual. Some would prefer saving those money for rainiy days. If it's so, the allowance would not help the economy at all.

Ezequiel said...

Bush is trying to enforce confidence in the Economy to the American citizen and consumer. However, this plan seems weak and as some people have pointed out already seems to be failing. It's just a matter of time till we find out what will be of the world's economy... and I certainly hope all turns out well.

santi c. said...

Even though the plan seemed to fail rapidly, Bush at least made an attempt to fix the economy. Like tyler has already pointed out, the plan may not be targeting the right sectors, but again, it is an attempt. If the US economy does not stabilize, then we can't expect others to stabilize either. Like it was pointed out the in the La Nacion article that hugo referenced to, the Asian stock markets were accumulating a 12% loss. This was definitely not the best way to start a new year.

Federico said...

I think it's very greedy of Bush to put only 1% of the total gdp into this as he puts around 4% of the gdp into something as useless as the operation Iraqi freedom (not because helping Iraq is bad but because they have killed almost twice as many Iraqis than the previous dictatorship has and their really hasn't been any "freedom" in Iraq since they got there). But getting back on this Bush recession thing, 140billion $ isn't going to repair something which has caused world wide effects. This is simply just a fast way to impose "hope" or to tell the nation it's all good and the government will take care of it. Whilst in reality they will most likely end up spending a lot more money than they think into this. After all, it was something similar to this that started the Great Depression in the 1930's.

rick_pimentel said...

Since I am not an American, I dont really know the average income, and income tax and all that, but from according to other people's comments Bush isn't pointing towards the right sector. I do acknowledge the fact though that 600 dollars isn't going to be enough for to stop the recession if it is coming. I don't agree with the fact that government is saying that everything should be 'temporary' because if they don't think about it in the long run, the same thing might happen in a few years. AS Hayek or Friedman would say, this is just a bump in the economy.

sam f said...

Again, this article was very interesting. I have to say that i agree with fede. I think that only putting 1% of the GDP into something as important as this economic situation is a wrong move. As fede mentioned, Bush is spending more money on less important things. I think that roles should be inverted and that the US and Bush should focus on investing in things like this oncoming economic crisis. While this move might bring hope to some people, it will not last in the long term or really affect anything.

Alfred A. A. said...

Well, I'm sure this has all been said before, so bear with me. Clearly, what Bush is trying to accomplish by implementing these tax recuts is to encourage people to continue spending money, so the recession won't hit as hard. However, this is not enough to make sure that the recession will be a small one. This will obviously hit people located in the low middle to low classes, and measures should be taken to ensure that they will be able to provide for their family and maintain their jobs, or if they lose them to make sure they get the support they need. It's odd seeing Bush actually go for small government though, I guess better late than never.

Adam_C said...

I think that the US needs to really move in on avoiding the potential economic crisis in the future. I do think that Bush does have a good plan, even though it's probably his economic advisers plan and not his. This plan will help the economy because it will lower the taxes, then businesses and people will have more money to spend. The economy will change in the future because of the increased amount of spending. It is finally good that Bush is looking out for the people, but he is also casting aside alot of the nations problems. The sky rocketing oil prices is one of these problems, a problem that should be delt with as soon as possible, because this is also one of the reasons the economy is on it's way down the toilet. I think that this plan, although it looks good now, will pose a possible threat to the economy in the future. The problem in the future will probably be that the nation will end up spending to much.

emilie said...

It's interesting to see that the US government is finally taking action after all the comments and signs of the failing economy during the holiday season. Bush was quoted saying, "Unless Congress acts, the American people will face massive tax increases in less than three years," Bush said. "This tax increase would put jobs and economic growth at risk." But already, we see signs of a risky economy. Why are there so many houses on the market? Why was it a low consumer spending holiday? The US as a whole has given clear signs of the failing economy... But honestly, is "rapid income tax relief" really the best method? I think it is good that he is encouraging small businesses to invest, but I'm still not sure if he is taking the right approach in dealing with the economic crisis, especially when elections are coming up and his plan is not approved by most democratics...

Estefi said...

this article, and president bush idea has many positive as well as negative outcomes.

lowering txes is obviously a good idea to help the recession in the united states to not hit the economy as fast as it is.
with thsi idea, the people will have more money to spend on the economy.

although, the lower classes are beign affected by this change.

but as everythign else this wont last long, since it may help the economy now..but later on it will end up once again hurting it.

maryeva said...

i think that president bush make and andvance trying to ïmprove the country" by racing taxes but with this percentage is not hepling much.
i dont get part of the article butwhat i got.. is not thts bad

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