Plans for $350 billion in bailout money
The last days of the Bush Administration are not going quietly, even though President Bush is looking to incoming President Barack Obama to dictate some key moves. In particular, Bush sought direction for his successor on the next step in the process for stimulating the economy using the remaining $350 billion of government bailout money.
There has been plenty of controversy as debate this week has centered on how to best use the remaining funds, and more importantly, how to ensure better accountability. Many Americans and lawmakers have expressed disappointment that the first half of the original $700 billion was not used for what it was initially approved. In fact, many people are unsure what exactly happened to much of the money as little has been documented about some portions of the expenditures.
Obama has actually been at odds with some leaders in his own Democratic party this week. Some Democrats have pushed for more use of the money to help average Americans deal with economic struggles as opposed to assisting corporate America and the banking industry. Obama has been getting closer to agreement with his party on some of the key issues and is asking his colleagues to not block the release of the money when the time comes.
One issue that has drawn much attention is the use of some of the money to assist people burned by the slumping housing market. Some economists have boldly stated this week that no long-term economic turnaround is going to develop without a great effort in the housing sector. Obama pledged to party leaders that billions in the bailout package would be used to help stem the foreclosure tide and assist homeowners who need to hang on to their homes.
Many other ideas have bounced around for how to best use the money to stimulate the economy. Talk of helping schools around the country that have been burdened with state budget cuts has been increasing. Other requests have been made for improvements in infrastructure including much need maintenance and repair for roadways, bridges, and other transportation programs.
Although there is still some argument over who should get what money, many top financial leaders have expressed encouragement of Obamaâ€™s ideas. Federal Reserve Chairman Ben Bernanke noted earlier this week that, while more needs to be done, Obamaâ€™s plan for using the stimulus money would definitely improve the business and jobs climate.
Perhaps the best news about the current scenario is that there seems to be more focus on detailing specifics about how to best spend the money. The purpose and use of the first half of the bailout money seemed to change almost daily after the initial bill was approved.
President-elect Obama has likely been the most active President-elect in US history. President Bush, sensing the need to exit office quietly, has relied on Obama to offer direction heading into his presidency, which begins early next week, following the Monday holiday honoring Martin Luther King.
Stocks stumbled Monday as economic worries took hold of the markets. The Dow dropped 125 points. Oil fell to $38 as oil companies struggled. Alcoa reported a $1.19 billion loss in the fourth quarter. President Bush made a request for the release of the remaining $350 billion in bailout funds, at the request of President-elect Obama. The dollar fell hard against the yen to below 89 yen. Stock fell modestly Tuesday. The Dow gave up 25 points. The dollar gained against most major currencies. Oil dropped to $37.
Tuesday, January 13, 2009
11:59 PM EST
Neil Kokemuller is an Associate Professor of Marketing at Des Moines Area Community College in Des Moines, Iowa, USA. He has a MBA from Iowa State University.
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Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.
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