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

Politics and bailout aren't mixing well

Former Rep. William Frenzel (R-Minn.) said the bailout plan failed to pass in Congress because of the "real struggle between the hard right and the hard left," at a discussion held by the Bookings Institute. He said there is "an extra level of animosity" between political parties, which made bills "doubly difficult" to pass.

Frenzel said that the bill will have to contain more "goodies" for it to be passed. In order to get the necessary 12-15 more votes to pass the bill, it will have to "move to the right" in order to get Republicans to vote for it next time. He was adamant the bailout would be passed because there was a small group of Congressmen that will change their vote.

Senior Fellow at the Brookings Institution Alice Rivlin said that the economy will recover when the United States "gets credit flowing again." She supported the bailout bill, saying it will "probably work." Rivlin said that if the U.S. does nothing, it could result in "a financial meltdown around the world." She added that if we can successfully rescue failing banks and companies, that there is no reason to think there is something "fundamentally wrong" with the U.S. economic system.

Professor of Entrepreneurship at MIT Simon Johnson said that while we are in a dangerous situation, the U.S. government is ahead of all other industrialized countries in economic expertise. He said that while the bailout plan is needed, we must take a comprehensive look at how this happened. He said we will "continually have problems if [the U.S.] relies on stopgap measures."