ITEM: From Bloomberg News — “Recession far from over, Summers says”
“WASHINGTON – The US economy will continue to contract ‘for some time to come,’ said Lawrence Summers, director of the White House National Economic Council. ‘I expect the economy will continue to decline,’ with ‘sharp declines in employment for quite some time this year,’ Summers said …
“Summers said the Obama administration is ‘on a path toward containment and toward building a path toward expansion,’ adding that ‘even sharp plans take time’ to work, perhaps six months or more …
“Summers reiterated the administration’s assertion that ‘the vast majority of banks in the US are well capitalized.’ Regulators have conducted stress tests on the 19 largest banks to determine whether they need more capital and are discussing their findings with bank officials this week. ‘We’re going to be in a good position to provide the support and set the framework in which the banking system can move along the process of recovery,’ Summers said.”
Time for some questions.
Q. What is “a path toward containment”?
Q. What is “a path toward expansion”?
Q. If about 23,000 men and women are being added to the jobless rolls every day, how many will be added to those jobless rolls over “perhaps six months or more”?
A. 23,000 laid off Americans x 182.5 days = another 4,197,500 unemployed Americans, or more.
Q. If the “the vast majority of banks in the US are well capitalized”, why are “regulators” conducting “stress tests on the 19 largest banks to determine whether they need more capital”?
Q. What is the “framework in which the banking system can move along the process of recovery”? Will those banks be able to provide employment for those 4,197,500 American workers who’ve been axed while those “stress tests” were being conducted?
ITEM: From the Associated Press – “WASHINGTON – The U.S. Treasury Department said Monday it will need to ‘borrow’ $ 361 billion in the current April-June quarter, a record amount for that period. Treasury ‘borrowed’ just $ 13 billion in last year’s April-June quarter. Treasury also estimated it will need to ‘borrow’ $ 515 billion in the July-September quarter.”
[$ 361 billion + $ 515 billion = $ 876 billion, which will be spent on bailout programs, not on job creation. A fraction of that amount would fund a shipbuilding program and create 50 million jobs.]