Thursday, January 31, 2008

the stupid economy

Despite the refusal of de facto President George W. Bush to utter the word "recession" at his State of the Union address, the economy is tanking. The Fed doesn't go slashing interest rates the way it has - twice in just over a week - for nothing you know.

So what to do? William Gross and Michelle Singletary both make the case against tax rebates. Singletary on the practical grounds that it's a bad example (the government will have to BORROW to do so) and in any case many people won't spend it but will save it, minimizing the boost to consumption. And Gross, the founder of PIMCO, the biggest bond mutual fund out there, thinks it won't be effective either. Instead he wants something to help people pay their mortgages. Which, incidentally, will help banks and others who hold bonds based on mortgages... and will of course help those who earn enough to afford a mortgage in the first place.

Sure makes you glad Bush didn't dump our Social Security money into the stock market, doesn't it?



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