NPR: Bernanke, Bush Call for Economic Stimulus

Bernanke, Bush Call for Economic Stimulus

Federal Reserve Chairman Ben Bernanke and President Bush Thursday both called for an economic stimulus package to prevent the country from going into a recession. The Associated Press reports that Bernanke said such a plan should be quickly implemented and temporary so that it won't complicate longer-term fiscal challenges.

And he said that something that would get money into the pockets of Americans now, would be more effective than other measures, including making President Bush's tax cuts permanent.

But the president doesn't seem to be opposed to jump-starting the economy. At the White House, spokesman Tony Fratto said, "The president does believe that over the short term, to deal with the softening of the economy, that some boost is necessary." It's the first confirmation from the white House that Bush supports government intervention.

But as NPR's Brian Naylor reports, the devil is in the details. Both parties want to present a united front on any measure taken to boost the economy, but they are not close to agreeing on what specifically needs to be done.

Brian reports that "Democrats [and some Republicans] tend to favor some direct cash infusions to low- and middle-income Americans in the form of tax rebates, by extending jobless benefits for those out of work, and by making food stamps more available."

Former Treasury Secretary Lawrence Summers said any stimulus package should add up to $75 billion to $100 billion - and maybe twice that.

But some Republicans want to see the president's tax cuts extended, while another group of conservative House Republicans want to cut the corporate income tax rate from 35 percent to 25 percent.

12:56 PM ET | 01-17-2008 | permalink

Comments (Send a comment)

I don't understand how extending the tax cuts is going to help stimulate the economy. The country has the tax cuts now (some of the country) and they haven't kept us from getting into this mess. Maybe the wrong people got the tax cuts.

Yes, yes, yes - sub-prime mortgage troubles - gas prices - that's what's REALLY causing the problem some folks say. Well, don't act like things like that have never happened before. They didn't necessarily cause the problems we see now.

Cutting taxes even more and spending more to help get out of the mess will just add to the already increasing deficit. Maybe that is a contributing factor to the problem.

Sent by Jim Dodd | 1:31 PM ET | 01-17-2008

As long as that stimulus is funneled to
his real constituency, those in the top
five percent of the wealthiest
individuals in the U.S., Halliburton,
the oil industry, and the pharmaceutical
companies, I have no doubt that
"Bush supports government intervention".

Sent by Marc Allen | 1:53 PM ET | 01-17-2008

After munching on cheap money (for way too long) the economy goes "Burp". That is part of the "natural order" of life.
This will be over as soon as oil prices come down (yesterday?). Then we'll all go back to munching on cheap oil.

Sent by Harold | 4:48 PM ET | 01-17-2008

Date: July-18-2008
Place:U.S house of representative.
Suject:U.S. Economy
Web Link : http://www.youtube.com/watch?v=_8pLpI5rzKI
Ron Paul:Do you anticipate that there is a possibility that we???ll face a crisis of the dollar such as we had in ???79 and 1980?
Ben Bernanke: The Federal Reserve is committed to maintaining low and stable inflation and I???m very confident that we???ll be able to do that.
Ron Paul: You???re not answering whether or not you anticipate a problem.
Ben Bernanke: I???m not anticipating a problem like ???79-???80.
Ron Paul: With your fingers crossed, I guess. OK. Thank you.

Ron Paul is true american patriot & a true VISIONARY, because he anticipated the current recession while all other candidates tried to score high on the patriot scale by claimng the economy is storng, & I am sure they ment it because non of them has the scientific educational background of Ron Paul who said that recession is a natural cycle of any economy & if you leave it to the FREE market it may last a year or so but once government intervene it may last 10 years.
Lets theoretically imagina that we all deals with gold. The gold didn't lose its value, people who doesnt have enough money (gold) wouldn't be able to get loan they cant afford,the price for the barrel of oil would have been stable (gold wise) & everybody would know how much he/has & how much he/she can spend, including the government.But the government can PRINT money whenever it needs, this extra money (not backed by gold has no value so it dilutes the value of the rest of the money, so your investment which woth a millin dollar suddenly became worth half a million, exactly what Ron Paul told Bernekee (people being robbed their saving), of course berneke denied that : he either didn't know (which make him not good for the job) or most probably he knew (then he is a liar trying to mislead the house of representative & the american people).
After all people wounder why Ron Paul has lots of supporters.

Sent by resimc | 6:32 PM ET | 01-17-2008

Some folks seem to believe that if we give low and moderate income Americans a token amount of money (say, a few hundred dollars per family) that those folks are going to spend that money in the near term, thus boosting the economy. Someone please explain why with an existing or looming recession, or worse, these folks, with their economic insecurity about the future, will do that. Wouldn't they be afraid they might need that money, and thus save it, or would simply use it to pay off bills? Of course, we have too much debt and don't save enough, so maybe that would be good, but would that really provide a short-term economic stimulus?

Sent by Doug | 8:13 PM ET | 01-17-2008

Doug,
Low income people don't think about next month, or "saving for a rainy day".

They spent money as soon as they get it. Unless they have credit cards, then they spent before they get the money.
Consumer spending is 2/3 of the economy now. Business is about selling stuff!

Sent by Harold | 11:22 AM ET | 01-18-2008

How can the powers to be actually believe that people who are in trouble with getting behind their payments on their house or credit cards or car payments will take the refund and go but a new HD television. Do they really think that people are that shallow that they would rather have a new TV than a roof over their heads. What about the deficit. With the war going on how come all of that money being pumped into our war machine is not holding up the economy? Where is that going? Is Haliburton spending their billons overseas? I may be simple minded but as long as people and governments lived within their means we would all be better off. Even if that ment smaller economy growth. It would be solid growth.

Sent by Philip Gaudreau Jr. | 7:19 AM ET | 02-05-2008

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