Does The Economy Need Another Stimulus?

(CBS)  Robert Rubin, a senior economic adviser to the Obama Campaign, is calling for a new stimulus package in the wake of the bailout bill passed earlier this month.

The former Treasury Secretary during the Clinton Administration said on CBS News' Face The Nation that he thought an "enormous amount" has been done with the bailout package, but "I think there's a good deal else we can do."

"I think it is imperative that we have a very large fiscal stimulus, although I do think that stimulus needs to be married to a commitment to long-term fiscal discipline, so we don't risk undermining our bond market and our currency market," he said.

Rubin told host Bob Schieffer that the package could include $1,000 tax rebates for families, but also could give help to cities and states running into difficulties and money for infrastructure if it is ready to go right now. Rubin added that the cost could be around $150 billion and that Democratic presidential nominee Barack Obama supports these measures.

"You could do all of that -- and it needs to be done in a very short period of time, in order to stimulate economic demand in a time of a weakening economy," Rubin said.

Douglas Holtz-Eakin, a campaign senior policy adviser to John McCain's campaign and a former director of the Congressional Budget Office, said that the Republican presidential nominee wouldn't take a new stimulus package off the table, but he focused instead on the $700 billion already passed and McCain's proposal to use much of the money to directly buy mortgages from banks and renegotiate them for homeowners.

"If you go back to what he talked about in getting mortgages off people's backs, that allows you to pay your grocery bills, that allows you to pay your gasoline bill. You can keep making your college tuition payments," Holtz-Eakin told Schieffer.

"There's no greater stimulus than keeping American households spending. They're 70 percent of the economy, and so focusing on them, keeping them in jobs, creating new jobs, that's the greatest stimulus of all.

"The idea that somehow tough economic times are a license to spend money on anything you can think of is something that you want to look at very carefully," he added.

Both Holtz-Eakin and Rubin defended their candidate as the best able to guide the country through the tough economic times. The advisers both said the situation could be turned around within months.

"Once you get past the crisis of confidence … you're still back in the kinds of difficulties we've had over the course of the past year," Rubin said. "You've had a lot of damage. You now have very large wealth loss. You've had weakened consumers, weakened financial institutions, problems around the world. There is a great deal that needs to be dealt with, and I do think in that context, public policy will be very, very important.

"And it is absolutely imperative that we have a highly active public policy approach. And I think [Obama] laid out -- not I think, he has -- laid out a very sensible set of measures to take in this respect. But it's going to take very strong presidential leadership," Rubin added.

Holtz-Eakin, meanwhile, criticized Obama's proposal to raise taxes on those making more than $250,000, and also to increase environmental regulation, as bad for the economy.

"A remarkable fact is that in this bad economy … small businesses have created 331,000 jobs this year. Don't raise taxes on them. Don't make their lives harder. And, you know, let's take care of the institutions, the small businesses, the home owners, that have been successful in America. And that's the McCain strategy," he said.

"Senator Obama has promised that, day one, he would enforce the Clean Air Act, treating carbon dioxide as pollutant. That runs the economy from the Environmental Protection Agency. It's a draconian regulatory approach. That's not a rescue for jobs," Holtz-Eakin added. "The question will be, who can most quickly generate jobs in this economy to keep the unemployment rate from spiking so high?"

Also on Face The Nation were Democratic Gov. Ed Rendell of Pennsylvania and Republican Gov. Tim Pawlenty of Minnesota. Both defended their candidate's prospects heading into Election Day next week.

(CBS)

Rendell (left) said he doesn't believe polls showing Obama with a 10-point lead in the state.

"I don't think we've got a double-digit lead. And I think complacency is our biggest foe in Pennsylvania. I've been agitating to get Senator Obama back. He's coming into Pittsburgh Tuesday, Philly on Wednesday. I think President Clinton is coming in," he said.

"Senator McCain and Governor Palin have been virtually living in Pennsylvania. And we need to have our candidates there. And Senator Obama is such a great campaigner. Everywhere he goes, the enthusiasm level goes up dramatically."

And despite polls showing Obama well ahead, Pawlenty stressed how the race isn't over yet.

(CBS)

"If you look at Senator McCain's life, it's an entire story of coming back from adversity and overcoming adversity," said Pawlenty (left). "Does Barack Obama have an advantage in the presidential race right now? Yes. But no one should ever count John McCain out.

"Time and time again, he's overcome and had comebacks in his life that have been incredible. And I think he'll do it again here."

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Read the full "Face the Nation" transcript here.

[patrik1974]

I was opposed to the stimulus checks in 2001 and 2008, along with the $700 billion bailout. If our capitalist economy needs government stimulation, then something in capitalism is not working the way it should. A sound economic should be able to weather downs in the markets, with profits when markets are up. Unfortunately, this is not the case. Instead of saving, Americans spent. Now, sadly, our government feels the need to rescue those, individuals and corporation blinded by greed and excess again. This is absurd. If the economy breaking, let it break. Maybe it is time to try out a new set of wheels, wheels that can absorb bumps, and the occasionally pothole, with profits from prosperous times. If McCain or Obama to be taking tax cuts, once again more glue sniffing. This is what everyone wants to hear, but is this really what is best for your in 5 years or 20 years. The federal deficit is $10 trillion. To talk of tax cuts, without plans to create a surplus or at least balance the balance budget for the fiscal year, is insane. The last guy said his tax cuts would create a balanced budget by 2010, unfortunately, during that time $5 trillion was added to the deficit. And now, 8 years later we want more tax cuts. We can%u2019t even afford what we got and what we want. I guess I will just have my children and grandchildren pay for our excess. Now, that I think about it, maybe when I die, I should just pass on my personal debt to them too.

[antoniof123]

http://www.youtube.com/watch?v=iivL4c_3p
ck
Posted by sommertime6 at 10:07 AM : Oct 27, 2008

So wing nuts are now quoting youtube. Oh this is great are you dumber than dirt or did you work at it.

[concerns47]

Yes, so some can just get by while others put it in savings, no spending for at least a year.

[mytoosense]

Handing Out $600 checks:

* Will NOT Replace Millions of manufacturing jobs paying $50,000 Plus plus per year.

* Will NOT Pay off the thousands of dollars of Credit Card dept the average American carries at rates that would make a Loan Shark smile.

* Will NOT be enough to pay one months rent for the millions of families who lost their home recently.

* Will NOT be enough to pay one months worth of average medical insurance.

If you are one of the fortunate who can afford to spend this money on consumer goods, good luck finding a product made in America.

I predict that the Stock Markets, world wide, will see a sharp solid improvement on November fifth when America and the rest of the world realizes that the folks that brought us this mess are entirely out of power in Washington.

[sommertime6]

If the philosophy of redistributing wealth is a concern to you and you want to know more about where Obama stands on this specific idea, here is a link to an interview with Obama while he was in the Illinois state legislature: http://www.youtube.com/watch?v=iivL4c_3p
ck

[gop_will_win]

Why is nobdy talking about manipulation of the gas PRICES!

The world wide economic slow down has brought down prices per barrel, but to the extent that Exxon/Mobil & Co. are passing the prices down @ the pump I think has more to do with wanting to see corporate friendly McCain in office. Usually they ignored price per barrel reductions as long as they could.

Also OPEC has benefited tremendously from the Oil connected Bush family.

Gas prices plummeting all the way up till election day? Somethings going on.


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Posted by joezap5
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Yes oil companies are so happy John McCain is going to be elected they cant lower prices fast enough. Please dont disappoint them come election day.

[oneworldusa]

I could use a $700 billion bailout. Anyone else?

[cjs_cnet_xyz]

What government needs to do is limit the interest that can be charged for credit cards. If the government can loan to the banks at 1% and the banks can charge 20-30% for the money, the economy will not recover for those who have incurred debt through financial hardships. It just exacerbates any recovery for those who have already suffered job losses or other financial problems. To say that banks are no longer allowed to pillage is like getting a stimulus that we don''t really have to pay for.

[pensacola98]

The Commodity Futures Modernization Act of 2000 was proposed by 5 House members of which 4 were Republicans, and 6 Senate members of which again 4 were Republicans. Neither the House of Senate heard debate on the floor before passing it.

After Enron went bankrupt over this loophole, the House and Senate passed the bill to close the loophole that was nicknamed the Enron Loophole, but President Bush vetoed the bill to close the loophole.

The Senator spearheading the Commodity Futures Modernization Act of 2000 was Texas Senator Phil Graham - famous for calling America the "Land of Whiners" who retired from the Senate. Graham is on the top of John McCain''''s list for appointment to the Secretary of the Treasury if McCain wins.

Graham, very popular in the 80''s for the Graham Rudman act to cut government spending over 5 years, a bill that was later repealed after failure to cap runaway spending was seen during the Reagan Era for a trillion dollar military spending history, 5 billion was for a super collider project later cancelled in his home state of Texas.

Graham went largely unopposed in bills that he sponsored. Today, he is credited for the Enron Loophole of the Commodity Futures Modernization Act of 2000 that fulminated into the stock market upsets seen in recent weeks.

Much of Graham''s advice was taken by President Bush and John McCain. Graham also told Americans a few months ago that Americans were in a "mental recession".

[hennighg]

Yes, it does. I recommend outing the neo-cons, putting a little thought into the middle class, remembering that patriotism isn''t cloaking oneself in the flag but DOING something for America, and maybe not do the same ol same ol this time around. I''m middle class. The republicans have nearly ruined us, and I have to bail out rich guys. Obama WILL have to raise money through taxes to remedy the problem and I won''t mind paying them to him. $ that goes to a republican goes to a rich guy.