About.com US Economy

Where Are Toxic Assets Now?

Thu, 19 Nov 2009 20:46:08 +0000

A reader recently asked "What happened to the $1 -2 trillion in "toxic assets" that caused the Great Recession?" Toxic assets are primarily foreclosed mortgages that are sitting on banks' balance sheets, waiting to be written off as losses.This is a great question, as these assets are the debris clogging up the bank lending pipeline.

Last year the Federal Reserve started the TALF (Toxic Asset Loan Fund) program to buy back this debt. This year, the Treasury Dept. launched the Stability Initiative Program. This created the PPIP, or Public Private Investment Partnership to encourage banks to join the government in buying each others' debt.

Where Are Toxic Assets Now? originally appeared on About.com US Economy on Thursday, November 19th, 2009 at 20:46:08.

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Eat at Home

Wed, 18 Nov 2009 10:47:58 +0000

In October, grocery bills were down 2.8% from last year, while restaurant prices went up 2.2%, according to the Bureau of Labor Statistics (BLS). September and October were the first times in 40 years that food prices benefited from deflation.

Overall, the Consumer Price Index (CPI) was down .2% since last year, largely due to a 14% drop in energy prices (Yay!). Inflation continues in health care, which is 3.2% higher than last year. (Source: BLS Consumer Price Index: August 2009)

Eat at Home originally appeared on About.com US Economy on Wednesday, November 18th, 2009 at 10:47:58.

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Americans' Love Affair With Credit Is Over

Mon, 16 Nov 2009 22:09:08 +0000

Credit card use in America continues to drop like at an unprecedented rate. In September, credit card debt, dropped 13% again, after falling 13% in August. The nine-month decline is the most since the Federal Reserve began keeping records.

The falloff is a result of continued high unemployment and tightened bank lending standards. In addition, credit card delinquency rates are rising, according to Lowcards.com.

Even with the drop-off, consumers still owe $889.4 billion, or $7,537 per household. (Source: Federal Reserve, G.19 Release, November 7, 2009)

Americans' Love Affair With Credit Is Over originally appeared on About.com US Economy on Monday, November 16th, 2009 at 22:09:08.

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Recession Over? No Way!

Wed, 11 Nov 2009 07:29:48 +0000

For most people, the recession is not over - even though government statistics say they are. As put so well by Jim Wygand, Principal Partner at Critical Corporate Issues, an international risk management consultancy,

The recession is over - the suffering is not. "Recession" is nothing more than a technical term that clicks in when two consecutive quarters of negative GDP growth are recorded. Meanwhile millions of Americans are going through what Allen is experiencing. (Click here to see Allen's comments.)So in a social sense, for Allen and millions of others neither the recession nor the depression (for them) has ended.

Recession Over? No Way! originally appeared on About.com US Economy on Wednesday, November 11th, 2009 at 07:29:48.

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Where Will the Jobs Come From?

Mon, 09 Nov 2009 20:52:31 +0000

A reader suggested that we buy locally to create local jobs. He calculated that 200 people spending $20 a week would create 1 job at $12 per hour. I don't know if it would work, but it shows the kind of creative, out of the box thinking that is needed to move this economy forward.

Where Will the Jobs Come From? originally appeared on About.com US Economy on Monday, November 9th, 2009 at 20:52:31.

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Unemployment Over 10%

Fri, 06 Nov 2009 22:28:39 +0000

The October employment report shows there are 5.8 million fewer jobs than last year. This trend is a tad better than September, when the economy was down 6 million jobs. These year-over-year stats show the trend is improving. In the 2001 recession, the economy did not regain health until this number trended up. Although that recession only lasted 8 months, it led to 29 months of job losses. (See Google Spreadsheet Employment)

Unemployment Over 10% originally appeared on About.com US Economy on Friday, November 6th, 2009 at 22:28:39.

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$3.2 Billion Well Spent to Help Vets

Wed, 04 Nov 2009 18:14:37 +0000

Sometimes you just gotta do the right thing. Secretary of Veterans Affairs (VA) Eric K. Shinseki announced the Federal government will spend $3.2 billion to rehabilitate 154,000 homeless veterans. This includes $2.7 billion on medical services to treat the debilitating depression and PTSD often caused by war. The remaining $500 million will be spent on homeless programs.

Will this help the economy get back on its feet, create jobs or increase GDP growth? We will never know. The results may never be measured. As discussed by Riane Eisler in her book The Real Wealth of Nations, GDP doesn't measure at-home child care, the cost to dispose of plastic or the misery of a veteran living on the streets. If it did, our society would change. Which is exactly what she argues. Until then, sometimes you just gotta trust your gut and know when its time to do the right thing.

$3.2 Billion Well Spent to Help Vets originally appeared on About.com US Economy on Wednesday, November 4th, 2009 at 18:14:37.

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How High Will Gold Climb?

Tue, 03 Nov 2009 14:36:08 +0000

Gold hit another all-time record of $1,081.70 an ounce, thanks to India's purchase of 200 metric tons from the IMF (International Monetary Fund).

How High Will Gold Climb? originally appeared on About.com US Economy on Tuesday, November 3rd, 2009 at 14:36:08.

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What Is the Real Cost of Medicare Fraud?

Mon, 02 Nov 2009 22:14:17 +0000

One of the key arguments in Obama's healthcare reform proposal is that the government can lower healthcare costs by 1.5% a year, by negotiating lower prices and reducing other inefficiencies. The annual healthcare bill is $2 trillion, so this would save $30 billion a year.

A recent "60 Minutes" show, repeated by many sources, says Medicare fraud costs $60 billion a year, which would negate the savings in the Obama plan. However, my About.com colleague and professional journalist Pierre Tristam reports the true cost is closer to $19 billion at most. My own estimates put fraud costs between $14-$30 billion.

Share Your Opinion - Should Healthcare Be Reformed

What Is the Real Cost of Medicare Fraud? originally appeared on About.com US Economy on Monday, November 2nd, 2009 at 22:14:17.

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Recession Is Over, Thanks to Stimulus

Thu, 29 Oct 2009 14:03:22 +0000

The economy grew 3.5% in the third quarter this year, the first time it has been positive since the recession started in 2007. Recessions are usually defined by negative GDP growth. The BEA report means the recession is technically over.

However, much of the growth was driven by the Economic Stimulus Program and the Cash for Clunkers incentive. Government spending contributed 2.3% to GDP growth, while motor vehicle sales contributed 1.66%. Without the spending, GDP would have still been negative. With a Federal debt level hovering around $12 trillion, how long can government spending drive the economy?

For a history of all GDP reports since 2007, see GDP Current Statistics. (Source: GDP News Release)

Recession Is Over, Thanks to Stimulus originally appeared on About.com US Economy on Thursday, October 29th, 2009 at 14:03:22.

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