Tuesday, October 21, 2008

Pelosi and Bernanke do not support the same stimulus package

Ben Bernanke said this on a second fiscal stimulus:
“Finally, in the ideal case, a fiscal package would not only boost overall spending and economic activity but would also be aimed at redressing specific factors that have the potential to extend or deepen the economic slowdown. As I discussed earlier, the extraordinary tightening in credit conditions has played a central role in the slowdown thus far and could be an important factor delaying the recovery. If the Congress proceeds with a fiscal package, it should consider including measures to help improve access to credit by consumers, homebuyers, businesses, and other borrowers. Such actions might be particularly effective at promoting economic growth and job creation.”
Pelosi said this on her stimulus package:
“In September, the House passed an economic recovery package that would create and save jobs by building a 21st century infrastructure, extend unemployment assistance and protect health care services for working families. Unfortunately, President Bush threatened to veto the recovery legislation and Senate Republicans blocked it.

Congress must try again. That is why I have asked the chairs of relevant committees to schedule hearings in the coming weeks on the key provisions of a fiscally responsible recovery package to get our economy moving again."
RW: I am not seeing how the two jive…at all. Bernanke calls on the house to consider a targeted package that includes responsible fiscal spending, especially in the area of job creation, and the promotion credit flow to consumers and firms. Pelosi’s approach is not targeted – she wants to create and save jobs with new infrastructure (??), extend unemployment assistance (which, by the way does not, in any way, create jobs), and protect health care services for working families – nor does it address spending to promote new credit for businesses and consumers.

Bernanke must be champing at the bit right now because Pelosi came out with this statement yesterday:
Chairman Bernanke made it clear that a new economic recovery package is critical to boost our weakening economy. In testimony today before the House Budget Committee, Chairman Bernanke added his voice to the chorus of economists, experts and policymakers who insist that America needs a job-creating recovery package to get our economy back on track and to restore consumer and investor confidence."
RW: Bernanke supports a new economic recovery package, but not her economic recovery package.

Rebecca Wilder

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