Three Keys to Recovery

Coffee Brown, University of New Mexico, Talk Radio News

“The annual budget process is really the truest test of priorities that the President and Congress engage in,” said Sen. Patty Murray (D-Wash.), as she, Sen. Bernie Sanders (D-Vt.), and Sen. Jeff Merkley (D-Ore.) met to define what those priorities are for the Senate Democrats. “We want to put the middle class first by cutting taxes and making key investments to bring this country out of this recession,” she said. The three then defined what those key investments are.

Murray spoke for education, “To revive the American economy and compete in this global economy, we have to expand educational opportunities for all Americans. Investing in education is one of the most certain ways to prepare a skilled and ready workforce.”


She introduced Jaim Foster, a second grade teacher from Alexandria, Va., who described teachers facing cutbacks and uncertain employment, as well as increased responsibilities as school nurses also were cut.

Sanders said, “For decades, politicians have been giving speeches about the need for energy independence.” We send hundreds of billions of dollars a year” out of the U.S., often to more or less unfriendly countries. “Finally the American people have said ‘enough is enough, we have got to do something real,’” he said. “The time is now to break our dependence on fossil fuel, and that is what we are going to do.”

He said the expert consensus is that we must address climate change, and that we are already seeing its effects. The budget will create “millions of good paying American jobs as we move to new kinds of energy,” he said, citing geothermal, wind, solar, and biomass.

He introduced James Walker, President, American Wind Energy Association, who said the industry went from $700 million in 2004 to $17 Billion in 2008, creating over 85,000 jobs. When it reaches its projected potential of 20 percent of our total energy needs, it will be the equivalent of removing 140 million cars, and will have created over 500,000 jobs, he said.

Merkley took healthcare. “I think everyone understands how broken healthcare is,” he said, citing 50 million uninsured, many more who are under-insured, and families whose top concern is "whether or not
they can maintain health insurance". “The stress is continuous,” he said.

Merkley said that “every single year, double digit increases” in premiums cause more small businesses to stop offering health insurance. He said even larger businesses are now advocating for change.


Sanders finished with, “Ask Sen. (Judd Gregg (R-N.H.)) if he still supports the repeal of the estate tax, which would give one trillion dollars to the wealthiest three tenths of one percent. That’s OK, but when you fund energy, when you fund healthcare, when you fund education, when you put Americans to work to improve the quality of life for our families, somehow that’s a terrible idea.”

Global economy crisis +stimulus bill = frustrated Senate Budget Committee

Today's Senate Budget Committee meeting titled "The Global Economy: Outlook, Risks, and Policy Implications" started off with Senator Kent Conrad (D-N.D.) reading off today's headline from the Financial Times entitled, "Economic Pain to be 'worst for 60 years." Conrad said "That is a story in the Financial Times today, pretty sobering."

The meeting consisted of witnesses, Simon Johnson, professor at the Massachusetts Institute of Technology's Sloan School of Management, Brad Setser, fellow for geoeconomics with the Council on Foreign Relations and Tim Adams, managing editor of The Lindsey Group. Their testimonies included information and statistics about the housing and economic crisis in general.

Senator Lindsey Graham (R-S.C.) asked each witness if they thought the first $350 billion bailout fund was spent wisely and Adams stated that the money should have been used for what it was supposed to be for. Graham agreed and said "People are running out of trust and patience with us up here."

Several Senators felt contrary to what was stated. Senator Debbie Stabenow (D-Mich.) said that she favored the bill. "I think it's important to say that the reality is our country, our government should have acted sooner on the issues in front of us...We have to do something different...I believe we need to act as quickly as possible to begin this because everyday the numbers get worse and worse and worse."

by Christina Lovato, University of New Mexico-Talk Radio News Services

"No country is immune"

In anticipation of the 2008 Annual Boards of Governors Meetings, popularly known as the ‘G-7’, International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn said “the economic crisis we’re in is very serious, but we can solve our problems if we act swiftly and coordinately.” Both the IMF director and World Bank President Robert Zoellick agree that this is a global crisis, and ‘no country is immune’. The leaders claim confidence and cuts in interest rates are the swiftest solutions to the crisis. Confidence is the first tool to be used in response to the economy, and Strauss-Kahn said “if you have the scope for fiscal stimulus, use it.”

The IMF predicts the global economy will have a slow recovery, but will come back starting in the second half of 2009. In order to initiate this growth, the IMF advises action to rejuvenate economic growth. This is why the IMF activated a ‘high access financial program’ yesterday, which will allow the management board to give fast and easily accessible up front payments, while also defining a long-term macroeconomic plan.

The IMF forecasts that the growth rate of developing countries will decline from 6.6% next year to around 4%. They say this is still an acceptable rate of growth, but the deceleration would be so sharp as to feel like a recession. Zoellick said “with the rising economic powers, the G7 countries can work through this crisis by dealing with bad assets, recapitalizing banks, and providing much needed liquidity.” Strauss-Kahn said that, “you can’t say a crisis affects all parts of the world and then develop economic policies that don’t consider the global economy”.

IMF offers mixed outlook on global economy

The Brookings Institution held a discussion this afternoon regarding perspectives on the global economic landscape. The panel addressed concerns over the declining value of the dollar, rising inflation, the role of the International Monetary Fund (IMF) and what these factors mean for the future of the global economy.

According to John Lipsky, first deputy managing director of the IMF said that the Fund predicts global economic growth will drop an entire percentage point to 4 percent this upcoming year. In addition, Lipsky stated that a primary concern for the upcoming year should be increased inflation, particularly in developing economies.

Lipsky also expressed concern over the continued decline in the value of the dollar. While the United States has seen increased exports as a result of this decline, the drop has been one of the largest sustained episodes of dollar decline in the last 50 years. However, Lipsky said that despite drops in the value of the dollar, he believes it will retain its role as the dominant international currency in the long term, though perhaps sharing it with other powerful currencies like the euro.

Lipsky also predicted an economic slowdown in the EU. He said that this could potentially be more devastating than economic issues in the United States, due to a lack of coordination of financial markets within the EU.

Domenico Lombardi, nonresident senior fellow of the Brookings Institution and president of the Oxford Institute for Economic Policy expressed concern over IMF attempts to regulate currency imbalances. While the organization has been particularly useful with developing economies, Lombardi worries that highly developed nations like the U.S. may be less forthcoming with financial information, and less cooperative with policies and oversight from the Fund.