Congress Attempts to Stimulate the Economy
Earlier in the year the US governm
ent sent out ‘stimulus’
checks to every taxpayer. The idea behind the move was that if consumers had extra funds available they would purchase goods and services. Unfortunately the move did little to stimulate the US economy. The US has lost approximately 170,000 jobs so far this year and the future looks anything but bright. US auto makers are in serious trouble and many plants are scheduled to close with job losses in the thousands. Consumers are uneasy about the future and instead of spending their stimulus checks as intended most chose to save it for the future or use the money to pay bills.
First Stimulus Package Ineffective
Despite the ineffectiveness of the stimulus checks Ben Bernanke the chairman of the Federal Reserve and congressional Democrats are proposing another round of stimulus checks. Earlier in the year congress sent out about $100 billion dollars in stimulus checks. Since then consumer confidence has evaporated and retail sales have fallen significantly in the last three months. Bernanke feels that the earlier $700 billion dollar bailout is starting to work but the effects will take months to be felt. Bernanke told congress that there is a likelihood of an extended economic slowdown and a second round of stimulus checks would help to get the consumer economy back on track. Fears of a US recession has fx traders around the globe uneasy and many predict a decline in the US dollar.
