Blogs » Politcs Plus » A glimmer of hope


Deborah Solomon, a columnist for the Wall Street Journal, writes that the government stimulus program appears to be helping us climb out of the worst recession in decades.

No one is sure which programs are having the biggest impact but some economists are giving credit to Federal Reserve's aggressive buying of treasury debt in the market backed securities. They also credit that the government's effort to shore up the banks. The Government's “stress test”of banks helped boost confidence on Wall Street allowing banks to raise capital and resume lending.

For the third quarter in a row economists at Goldman Sachs and Company predict that the U.S. economy would grow by 3.3%. Without that stimulus ,we would be around 0% growth, according to their economists.I know ,if we put 10 different economists in the same room for their analysis,we probably would get 10 different answers.

Credit was given for the $8,000 tax credit for the first-time-home- buyers for the rise in the housing market . The cash- for -clunkers program , was also given credit for the rise in automobile sales.

Of course we still have the skeptics like Stuart Hoffman, chief U.S. economist for PNC Financial Group Services saying that this concentrated burst exaggerated the pace of economic growth.I don't necessarily disagree with his assessment. That is the definition of stimulus economics.

Daniel Gross, columnist for Newsweek, writes that the controversial $700 billion TARP package early returns are pretty impressive. He claims that the final cost of TARP will be a fraction of the original $700 billion, and actually turned a profit and for its central component: the Capital Purchase Program. This can all be checked out at

The taxpayers have received an annualized return of 17.5% from the 22 companies that have bought back shares and warrants. The author reports that the taxpayers have received $70.3 billion, in principle, plus about $10 billion in dividends and warrant payments. The taxpayer now holds 7.69 billion shares of Citibank, on paper,the way the market is going, that's a $10.52 billion gain. If only they could allow us to cash in.

On the downside, Fannie Mae,AIG, and General Motors are not expected to bring in a positive return, since they were designed to avert a meltdown. The job market continues to struggle and the outsourcing of 1,100 hundred jobs to Mexico by Whirlpool, did not help, especially since we lost 298,000 jobs in August.

Conclusion, foreclosure are still up, plenty of banks are still in trouble, but as Lee Sachs, counselor to the treasury's secretary said “our Financial System and is not going into a total abyss.”