Bernanke calls for another fiscal stimulus plan to revive the U.S. economy

Washington - October 20, 2008 - The Federal Reserve chairman, Ben Bernanke, believe that it will take a fiscal stimulus package to help the recovery of the economy and avoid a protracted stalemate. "With the economy may be weak the next few quarters, and with the risk of a prolonged slowdown, it seems appropriate to consider a tax package in Congress," Bernanke said in his speech before the Budget Committee of the House of Representatives.

Bernanke added that any new plan should be timely, temporary and focused. Bernanke also suggested that Congress should include "measures to help improve access to credit for consumers, home buyers, businesses and other borrowers."

It is the second time that the Federal Reserve chairman calls for a program of fiscal stimulus, in another acknowledgment that the economy will not be recoverable only through monetary policy.

This spring, Congress has already approved an incentive plan in which returned $ 600 per person, and it seems that it will manage to keep the economy afloat during the summer.

In addition, Bernanke has used the same principles that then (a timely, focused and temporary), however, did not give more details now and is expected to respond to questions from lawmakers.

Typically, the plans for fiscal stimulus policies covering taxation and public spending to try to revive demand temporarily, either by returning money to taxpayers or the state to spend on their own.

Speaking of economics, Bernanke stated that he saw some hopeful signs on the Unstuck of credit markets following the lowering of rates coordinated. "It is too early to assess the full effects," said the chairman of the Fed.

"The stabilization of the financial system, through this first step, it will not quickly remove the challenges faced by the whole economy," Bernanke added. "The pace of economic activity could be below potential for several quarters."

My Opinion

The measures taken to rescue the financial sector will not be sufficient, since these measures are aimed at bank liquidity.

But it does have the liquidity usually the common people, people nowadays do not have the money or because it has lost money or has been dismissed thus has been unable to pay the mortgage on his house, and this is I say from a personal point of view.

People need to re-take power, which would help the banking system.

It is possible that the United States enters into a phase of layoffs that will not help anybody, nor the banking industry or the people, as is evidenced by the fact that a company like Yahoo will be put to lay off 1,000 jobs. An example that can be followed by other companies in order to survive the current crisis.

The question is no longer avoid a recession, because U.S. is in recession, but the point is to survive the recession.

Source: El Economista