Despite bracing for the worst, a comprehensive look at the official hard data has provided another dose of the sobering economic reality for the young Obama administration.The economy "is worse, quite frankly, than everyone thought it was," Lawrence Summers, President Obama's chief economic advisor, said Sunday on NBC's Meet The Press.
"We've got to spend money now while we have a recession, while we've got this serious economic crisis, but as soon as the economy recovers we are going to have to find ways of getting the government's finances under some kind of control," Summers said.
Summers added that the U.S. economy faces "very difficult" months ahead, which underscores the need for U.S. Congressional approval of the Obama administration's $825-850 billion fiscal stimulus package.
The plan is expected to be approved by both the House and Senate, but most likely with modest revisions. Some Republicans have said they want more tax cuts in a revised plan, with House Minority Leader John Boehner, R-Ohio, calling some projects wasteful, Bloomberg News reported Sunday.
Economists surveyed by Bloomberg News expect the U.S. Commerce Department to report that the U.S. economy contracted by 5.5% in Q4 when it releases the data Friday. It that occurs, that would be the largest contraction rate in 26 years.
Fiscal Policy / Economic Analysis: Depending on the methodology used, a $825-850 fiscal stimulus package would increase commercial activity by $1-1.5 trillion, and the package can't take place fast enough. Based on current GDP projections, the $14 trillion U.S. economy could fall $1-2 trillion short of its full capacity in 2009 -- forcing-up unemployment to near double-digit levels, and resulting in large declines in corporate revenue and earnings.
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Reader Comments (Page 1 of 1)
1-26-2009 @ 1:14PM
Kent said...
GOP and Dems need to arrive at the meeting of the minds to pull the economy out of this recession. Reaganomics and Keynesianomics are economic ideologies that no longer will work as each in their absolute terms will lead us into disaster either way you look at it. Congress now needs to figure out a pragmatic approach and abandon anymore party-line approaches. We are no longer interested in competing economic philosophies.
1-27-2009 @ 9:33AM
tjjsm said...
Lawrence Summers? You're a moron.
If you and the group are just now figuring out that "It's worse than we thought" y'all are being paid way too much, too ignorant or just plain idiots.
The rest of us working class knew the economy was in it deep four years ago.
2-28-2009 @ 8:15PM
robin said...
That what happens when alot of people look the other way. I have always paid attention to what is going on. I don't want to hear that religion will pay the bills and get us out of economic troubles. That is a total lie. Some of the problems are because of greed. Lower prices and more sales people will buy. I am so tired of hearing also we have to stick to the people because it cost more to ship and transport. I can't believe the amount of lies that people will tell. I remember going to a dealership that was 45 minutes from my house because they advertised a vehicle that i was interested in at very good price. To cut the story short. It someone a half hour to come over ask me if I needed help. Also They said what was doing in the area because it was so far from house. Just the those two reasons alone would change my mind about buying the car. i only bought it because it was a great deal. When I went to buy another car off the same dealership the pulled the same thing and they also said if they lower price alittle bit they make no money. I told him he was lieing. So we bought another car. Last year I went to trade in my car. They didnt want to come over to me, and they didnt want to make deal. So I went to a different dealership and they were great. I was acutually surveyed buy the other dealership and I told them what happened. I said after how I was treated I will never buy another car off them again. The economy is bad and your chasing people away because there not from the area. Thats another stupid reason. Alot people do that in that specfic area. I made a promise, if another store ever seys to me again, I will not shop ever again. I also would like to tell everyone how there are alot of mortgage brokers that lie, cheat, steal just so they get money. They end up sticking people with mortgages they can't afford. When I went to refiance 2 years ago I had about 20 companies try to scam me. It is a total shame. I found out one company that took money from me and never closed the deal,had 39 complaints against them through the better business bureau. I think its time they get what coming to them. The brokers sell the mortgages to the banks and the banks get stuck. In my area they were giving people with certain ethnic backgrounds brand new homes they couldnt afford. Lieing about incomes and other information. It was in local newspapers. I called one mortgage guy a used car salesman. I not trying to insult anybody but the guy tried to lie to me so bad. they send fliers in the mail to attract customers. I have another company that tried to scam still to this day sending me letters. I will never deal with anybody like that over phone or buy mail. I ended up refiancing through a legit company close to my house in person. I had a little trouble even with the mortgage processor trying to change things, but we told one of the big personel in the office what was going on, and they didnt want to hear it. So that person took everything over and it was okay. After all the trouble we had it was a nightmare and this is all before the recession started. What im trying to say is that this recession was starting eight year ago not a year or two.