Economy in 'Sharp Decline,' Paulson Admits

He won't say recession, but treasury secretary comes close
By Peter Fearon,  Newser Staff
Posted Mar 19, 2008 5:46 AM CDT
Foreclosures continue to rise underscoring the suffering of distressed homeowners and the growing danger the housing meltdown poses for the economy.
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(Newser) – Hank Paulson came closer than ever to conceding that the economy is in recession in a series of interviews yesterday, Reuters reports. Weary after a weekend in which he helped to broker Bear Stearns' fire sale to JPMorgan, the treasury secretary avoided the R-word but admitted: "There's no doubt that the American people know that the economy has turned down sharply. So to me much less important is the label that's placed on it today."

Paulson predicted the Bush administration's $152 billion stimulus package "will start making a difference here in the second and third quarter, maybe adding 500,000 or more jobs," he told ABC News. But despite his confidence in the resilience of capital markets, the secretary said he had to remain vigilant "to minimize the spillover to the real economy."