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Bush’s New Plan For Economy: Have Confidence (NO New Stimulus) UPDATED

Posted by JOE GANDELMAN, Editor-In-Chief in Economy, Politics.
Mar 14th, 2008 | Comments

President George W. Bush has huddled with his economic advisers over the past few weeks. He knows about the foreclosures. He sees the job statistics. He hears warnings that things may get worse. And so he’s about to propose his bold new plan: Have confidence.

And in addition to “no new taxes,” he will be offering No New Stimulus:

President George W. Bush today will argue that the sputtering U.S. economy is fundamentally sound without offering new initiatives to stimulate it or to help homeowners facing mortgage defaults.

“Americans should have confidence that this economy will return to stronger growth,” said White House spokesman Tony Fratto, previewing an address Bush plans to give today to a gathering of business and finance leaders in New York. “You shouldn’t look for new major announcements.”

A surge in defaults on mortgages to higher-risk borrowers spurred the collapse of the U.S. home loan market. Defaults have continued to rise even as the Federal Reserve has cut the benchmark interest rate five times since September. The Bush administration has urged lenders to help homeowners by modifying mortgage terms.

Congress wants the government to do more. House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd, saying the U.S. is in a recession, offered a plan yesterday to let the Federal Housing Administration insure refinanced mortgages after lenders reduce principal to help struggling borrowers.

Here’s an idea:

The late President Gerald Ford offered a WIN button (Whip Inflation Now). Where’s the HC button Bush wants to give out to people losing their homes, their jobs, who have bills they can’t pay, the landlords who have vacant office space, the developers who started condos but had to halt them or can’t sell them?

An HC button would be a good idea. Hillary Clinton could also get some mileage out of it.

UPDATE: With only few changes in the words, Bush could use this as his theme song when he talks about his plans for the economy:

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DLS

Stimulus = buying the votes of childish losers

JWeidner

Wow. This administration just bowls me over with this bold new plan. I tell ya - next time I go to the supermarket, I'm not whipping out my wallet to pay for groceries. Nope, I'm just gonna walk my cart out the front door and tell 'em "It's OK, I have CONFIDENCE!"

mikkel

It might have been better if he said that there would be no new stimulus before the FED made a non-recourse loan to Bear Stearns. And before they committed $200 billion to loan out that will be backed by questionable mortgage securities. And the $100 billion in secret discount window stuff.

Basically by no stimulus he means they are spending all our money by giving out loans for worthless junk that will probably be eventually lost.

And yes, the people most livid about this are the free marketers.

casualobserver

Well, since neither the Keynsian nor Friedmanian solutions have produced 2 month miracles, might as well throw a bit of Lucasian manipulation at it as well.

DLS

Don't forget that Cheney is going to visit our friends the Arabs -- no doubt to tell them to take it easy on the oil price hikes (the Bush administration inner circle may believe the GOP has a serious chance at keeping the White House this year).

cjfalcon

The time has certainly past when any type of stimulus can bail out our rapidly collapsing economy. History, shows just how bad the economy was when import taxes were levied against our European neighbor's who now make the U.S. their home. The power of greed, or want to have extreme leverage over thy neighbor is the origin of the present day disaster in economics. Thus, the economy of our country has always been based on misery, the more misery there is the more money there is to be made. Depending, on which end of the spectrum an individual finds themselves. Furthermore, the worst is yet to come because those holding onto the poor working classes money, are not going to give it back. Once you hand someone your hard earned cash, it is almost impossible to get a return. Multiply that times 100 trillion. now, it should be easy to understand how bad it is going to get.

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