Stimulus Package

The government's stimulus package has worked—for now at least, the New York Times reports. Spending rose 0.4% last month, the Commerce Department said today, buoyed by the $50 billion in checks sent to consumers. But subtract the stimulus, and income levels rose only modestly, and wage growth lagged well behind inflation. More »

Roughly 5 million people who qualify for a stimulus check could be out of luck because they haven't filed a tax return, CNN reports, and the IRS is scrambling to let them know. These un-stimulated masses consist mostly of seniors and veterans who don’t normally file returns. “I think there are some natural barriers to getting some folks to want to file a return again,” one IRS employee theorized. More »

Forget those predictions of a US economic revival in 2008, Daniel Gross writes in Newsweek . The four horsemen of the economy—credit and housing crises, food and energy prices—are getting meaner, while booming commodities and crunching credit are curbing attempts to fight back. "As a result, the consumer-driven economy may not bounce back as rapidly as it did in the fraught months after 9/11," Gross writes. More »

Rather than the gluttonous splurge on flat-screen TVs and foreign vacations that Uncle Sam had envisioned, most Americans are plunking their rebate checks down on exorbitant gas and food costs--and their mounting debt. “The initial sense is that people are not running out the malls,” one economist told the New York Times . The sense of restraint may fail to buoy the economy as hoped. More »

A growing number of economists are saying, cautiously, that the US might have pulled back from the brink of recession, the Wall Street Journal reports. The experts credit swift action by the Federal Reserve to lower interest rates and save Bear Stearns in March, and even the ongoing distribution of fiscal-stimulus checks, as catalysts for the detour. More »

Hundreds of thousands of legal, taxpaying immigrants and their Americans spouses are among the unhappy few who won’t be getting a tax rebate check, AP reports. Taxpayers need a Social Security number to qualify—a rule intended to carve out illegal immigrants. Also inadvertently cut from the benefit are legal residents and American citizens—including US soldiers—who filed jointly with a spouse without a Social Security number, which can take years to obtain. More »

The first tax rebates designed to kick-start the economy should begin arriving in bank accounts today. The Treasury Department has begun sending electronic rebates to nearly 8 million people by the end of this week, and some 130 million checks will go out via snail mail in May. President Bush hopes taxpayers will spend the cash—up to $600 for individuals, $1,200 for couples—but economists say many will save it or pay off debts. More »

Wary investors appear to be returning to Wall Street, the Journal reports, buying back into higher-risk debt issues from the likes of troubled Citigroup and Merrill Lynch. “Risk taking has come back in the market,” said one expert. More »

Again steering clear of the R-word, President Bush said today that the tax rebates scheduled to be distributed starting next week will "give our economy a boost to help us pull out of this economic slowdown," Bloomberg reports. More »

Treasury is putting its rebate money where its mouth is—ahead of schedule, Reuters reports, with the first wave of checks going out Monday. “We're a little bit ahead of schedule, so we will start right on Monday with direct deposits," Henry Paulson tells Reuters. The Treasury secretary is happy to get cash into Americans’ pockets a little quicker, in order to stave off worsening economic conditions. More »

The bill was rushed through the Senate to come to the aid of homeowners facing foreclosure, but it turns out that some of its biggest beneficiaries are automakers, airlines and energy producers. The Senate’s housing bill is packed with billions in corporate tax cuts, the New York Times reports. With populist fervor behind the bill, lobbyists from a host of industries hit the Hill. And while the bill would help homebuilders and homebuyers, there’s little to actually prevent foreclosures. More »

The subprime crisis isn’t bad for everyone: congressmen and lobbying firms are doing great, Politico reports. Industries caught in the crunch have drastically scaled up their campaign contributions, and dozens of new lobbying firms have sprung up to cash in. Securities and investment PACs, for example, have already given more in 2008 than they gave throughout the midterm elections in 2006. More »

Lawmakers are suddenly coming together on housing, with Republicans supporting a bill they left for dead two weeks ago, and Democrats cooling the political rhetoric for a change. The difference: those two weeks were spent back home with constituents, Politico notes. “Unless every member of the Senate was in a cave over recess, it’s clear that gas prices and housing were the most important issues,” said GOP Sen. Johnny Isakson. More »

The high-profile economic woes plaguing Wall Street and previously hot housing markets are spreading, raising the possibility of the worst recession Americans have faced in years. The New York Times crisscrosses the country, assembling anecdotal evidence—suddenly thrifty brides, unsold construction equipment, sinking earnings at FedEx—that suggests the slowdown could drag into 2009. More »

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." More »

The economy is experiencing difficulties, but President Bush said today he is certain a recovery will come soon, the AP reports. “In a free-market economy there will be good times and bad times” he said in a speech to the Economic Club of New York. “We’re going through a hard time.” Democrats wasted little time in rebutting, dispatching Chuck Schumer to invoke Herbert Hoover. More »

A perfect storm of economic maladies has the US economy reeling on the edge of recession and officials struggling to limit the damage it causes, reports the New York Times. But many economists say there isn’t much the government or policy makers can do besides batten down the hatches and, in the words of a Charles Schwab analyst, “let the system wash it out.” More »

A panel led by Treasury Secretary Henry Paulson is seeking a major overhaul of rules affecting mortgage lenders and a credit market decimated by risky subprime loans and loose oversight, the Wall Street Journal r eports. Among panel recommendations to be released today: Strengthen mortgage lender and broker oversight Establish licensing standards for mortgage brokers More »

Newsweek blogger Daniel Gross asks why Wal-Mart, with its sales increasing, appears to be untouched by the US economic slowdown, and comes up with four answers. One, the behemoth mostly sell necessities. Two, its cheaper-than-thou branding is attracting pinched customers. Three, investors like Wal-Mart's prospects down the line. And four, the store is becoming increasingly international. More »

Even people who didn't make enough money last year to be required to file a tax return are going to have to do so this year—if they want to get their rebates under President Bush's $170 billion economic stimulus plan, Reuters reports. The IRS is planning an information blitz to make eligible people, especially Social Security recipients, aware that they have to file or they won't see a penny. More »