Events Calendar
In This Section
Fees eat up gift-card balances
Can't find the hot new toy? Blame the economy
Stocks jump after G-20 pledge to aid economies
Framed for child porn -- by a PC virus
Strollers recalled for fingertip amputation hazard
Ohio gas prices down 8 cents from last week
Most Read Stories
Unusual sports bar to be sold at auction
Motorcyclist killed, wife injured in Stark County crash
Family found dead in Ohio home
Man says he was punched, robbed by 3 people in parking lot
Man gets 3 years in prison for having sex with horse
Bank helps more save their homes
Circle K on Brown Street robbed
Woman says clinic refused to help her get pregnant because she's not married
Blogs:
Pets:
Cats are trainable — and that's not a punchline
The Heldenfiles:
Monday Notebook
Patrick McManamon:
Time for Kokinis, Browns to agree and part ways
Akron Zips:
Zips tip off tomorrow
Tribe Matters:
Indians announce spring dates
Cleveland Browns:
Mangini doesn't name a quarterback
Kent State Sports:
KSU Notes – November 9
Cleveland Cavaliers:
Shaq: It’s All About Winning Championships
Buckeye Blogging:
Weekly ‘B’ Deck Report – New Mexico St.
Varsity Letters:
Walsh Jesuit’s Caponi commits to Duquesne
All Da King's Men:
If It Looks Like Islamic Terrorism…
Blog of Mass Destruction:
Dems Message To Women: Don't Enjoy The Sex
Akron Law Café:
Abortion Analogies
See Jane Style:
Muffle Your Muffler
Car Chase:
Clock Tender- Extending the Life of Collector Car Clocks
Let's Talk Real Estate:
Rumors: Akron Starbucks Closing
Ohio Travels with Betty:
Jack is looking for a trip to Southern Ohio the week of November 16.
Sound Check:
The Black Keys to perform benefit concert at Musica on November 27
HRLite House:
Personal Rant – Why People Do Not Live in Northeast Ohio
Akron Gamer:
New 'Call of Duty' could set entertainment record
By Jeannine Aversa
Associated Press
POSTED: 08:50 a.m. EST, Jan 13, 2009
WASHINGTON: Federal Reserve Chairman Ben Bernanke said today the stimulus package being crafted by President-elect Barack Obama and Congress could provide a ''significant boost'' to the sinking economy. But he warned that such a recovery won't last unless other steps are taken to stabilize the shaky financial system.
Although Bernanke has previously endorsed the notion for a fresh round of government stimulus to lift the country out of a recession, it marked the first time the Fed chief has referenced the roughly $800 billion recovery plan now being worked on by Obama, who takes office next week. Obama envisions a blend of tax cuts and increased government spending, including on big public works projects, to make up the stimulus plan.
Bernanke, who didn't weigh in on the details of the evolving package, made clear that such a recovery plan was needed as part of a broader, multi-pronged government response to combat the worst financial crisis to hit the U.S. and the global economy since the 1930s.
''The incoming administration and the Congress are currently discussing a substantial fiscal package that, if enacted, could provide a significant boost to economic activity,'' Bernanke said in a speech to the London School of Economics.
''In my view, however, fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,'' he warned. ''History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively.''
To help on that front, the Fed is loaning out billions to financial companies and buying mounds of companies' debt to help bust through the debilitating credit clog. And the Treasury Department is overseeing a $700 financial bailout program that has pledged to inject $250 billion into banks in return for partial government ownership. Some money from the bailout pot also is being used to guarantee against possible losses from risky assets held by Citigroup Inc.
Bernanke said ''more capital injections and guarantees may become necessary'' to stabilize financial markets and spur more lending. If Obama's incoming Treasury secretary Timothy Geithner decides to remove toxic assets from financial institutions' balance sheets — the original but abandoned strategy under the $700 billion bailout — Bernanke suggested some options to do that.
Public purchases of the troubled assets are one way to go, he said. Another option is to provide asset guarantees under which the government would agree to absorb — presumably in exchange for warrants or some other form of compensation — part of the prospective losses on specified portfolios of rotten assets held by banks. Yet another approach would be to set up and capitalize so-called ''bad banks,'' which would buy assets from the financial institutions in exchange for cash and equity in the bad bank.
WASHINGTON: Federal Reserve Chairman Ben Bernanke said today the stimulus package being crafted by President-elect Barack Obama and Congress could provide a ''significant boost'' to the sinking economy. But he warned that such a recovery won't last unless other steps are taken to stabilize the shaky financial system.
Although Bernanke has previously endorsed the notion for a fresh round of government stimulus to lift the country out of a recession, it marked the first time the Fed chief has referenced the roughly $800 billion recovery plan now being worked on by Obama, who takes office next week. Obama envisions a blend of tax cuts and increased government spending, including on big public works projects, to make up the stimulus plan.
Bernanke, who didn't weigh in on the details of the evolving package, made clear that such a recovery plan was needed as part of a broader, multi-pronged government response to combat the worst financial crisis to hit the U.S. and the global economy since the 1930s.
''The incoming administration and the Congress are currently discussing a substantial fiscal package that, if enacted, could provide a significant boost to economic activity,'' Bernanke said in a speech to the London School of Economics.
''In my view, however, fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,'' he warned. ''History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively.''
To help on that front, the Fed is loaning out billions to financial companies and buying mounds of companies' debt to help bust through the debilitating credit clog. And the Treasury Department is overseeing a $700 financial bailout program that has pledged to inject $250 billion into banks in return for partial government ownership. Some money from the bailout pot also is being used to guarantee against possible losses from risky assets held by Citigroup Inc.
Bernanke said ''more capital injections and guarantees may become necessary'' to stabilize financial markets and spur more lending. If Obama's incoming Treasury secretary Timothy Geithner decides to remove toxic assets from financial institutions' balance sheets — the original but abandoned strategy under the $700 billion bailout — Bernanke suggested some options to do that.
Public purchases of the troubled assets are one way to go, he said. Another option is to provide asset guarantees under which the government would agree to absorb — presumably in exchange for warrants or some other form of compensation — part of the prospective losses on specified portfolios of rotten assets held by banks. Yet another approach would be to set up and capitalize so-called ''bad banks,'' which would buy assets from the financial institutions in exchange for cash and equity in the bad bank.
Comments
Click here to post your comments
Akron, Oh
Posted 09:15 AM, 01/13/2009
Sounds like the same B.S. that we have been listening to since the eighties. Nothing is going to change for the better as a whole. They will give us a little here and then take back more from over there. LOL
Posted 10:32 AM, 01/13/2009
Thanks, economist DAG.
