Bush says rebates going out Monday will boost economy

Bush says rebates going out Monday will boost economy

By TOM RAUM,
AP
Posted: 2008-04-25 13:36:26
WASHINGTON (AP) - President Bush said tax rebates will start going out Monday, earlier than previously announced, and should help Americans cope with rising gasoline and food prices, as well as aid a slumping economy.

Democrats said they were glad the rebate checks were about to go out, but suggested that multinational oil companies were not among the businesses the stimulus package was originally designed to help.

"Starting Monday, the effects of the stimulus will begin to reach millions of households across our country," Bush said Friday in remarks on the South Lawn of the White House.

Those first rebates will be directly deposited into people's bank accounts. The Internal Revenue Service had been saying direct deposits wouldn't start until next Friday. Bush said paper checks would begin going out on May 9, a week earlier than previously announced.

"The money is going to help Americans offset the high prices we're seeing at the gas pump, the grocery store, and also give our economy a boost to help us pull out of this economic slowdown," Bush said.

Bush's emphasis on fuel and food prices differed from other comments he's made since signing the economic stimulus legislation, intended to aid the economy by boosting overall consumer spending - which accounts for roughly two-thirds of the nation's economic activity.

Bush has suggested the rebates could trigger a spending spree. "When the money reaches the American people, we expect they will use it to boost consumer spending," he said last month.

By saying expressly that people could use these one-time checks to pay for such necessities as food and gas, Bush underscored the deepening challenges facing the economy.

Democrats were quick to pick up on the change of focus.

"It's galling to think that taxpayers' stimulus checks will be lining the pockets of OPEC. The sad truth is that the average American family will spend almost their entire stimulus check on higher gas prices this year," said Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee of Congress.

OPEC is the Organization of Petroleum Exporting Countries.

"Unless the administration gets OPEC to increase oil supply, American consumers are going to be in for a scorching summer of $4 gasoline with no relief in sight," Schumer said.

House Speaker Nancy Pelosi, D-Calif., agreed that people "need this rebate to cope with the rising cost of gas and groceries." She said that, while the rebates would help to get the economy moving, there was a need for a second stimulus package "and we have begun some conversation with the administration and Republicans."

As he had earlier in the week, Bush used the word "slowdown" to describe the state of the economy. He has denied that the nation is in a recession, although many economists say it is.

"It's obvious our economy is in a slowdown. But, fortunately, we recognized the signs early and took action," Bush said.

The rebates - up to $600 for an individual, $1,200 for a couple and an additional $300 for each dependent child - are the centerpiece of the government's $168 billion stimulus package, enacted in February. Roughly 130 million households are expected to get them.

Bush made the comments before boarding his helicopter at the start of a day trip to Connecticut.

People must file a tax return for their 2007 income to be eligible for a rebate check.

The IRS now says all checks for those who filed tax returns on time are scheduled to be deposited or mailed by July 11.

The economy - burdened by the collapse of home prices, a financial and credit crisis, and now rising energy and food prices - grew at an anemic 0.6 percent in the final three months of last year and is believed to have gotten even weaker in the first three months of this year.

The government will report on the first quarter's performance next week.

With the economy faltering, the nation's unemployment rate has climbed to 5.1 percent, the highest since September 2005, when it suffered from the devastating blows of the Gulf Coast hurricanes. Job losses in the first three months of this year neared the quarter-million mark.

Foreclosures have surged to record highs and financial companies have taken multibillion losses on mortgage investments that soured. The situation has sent a tremor through Wall Street and has sent the administration, Congress and presidential contenders looking for ways to provide relief.

AP Economics Writer Jeannine Aversa contributed to this report.

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That's great, GT. I wish they'd do that in every state. It just sickens me to think that schools have to close in Georgia, that our children's education takes a back seat to oil company profits. So much for who's REALLY left behind under Bush.

suppose they will have to revert to the rapid approach of the rapture or some such. Or more topically, the War Against Christmas. It is a shame there are no patriots outside the democrat party anymore . . .

5. I give what I can to the food banks and my church etc. to help those who need help.

I did not vote for President Obama. I do not think he is the messiah and I certainly will not blame him for the mess we are in right now simply because we all played a part. No one forced anyone to take house loans that they could not pay, no one forces us to use our credit card and run up debts and live beyond our means, no one predicted that you would take a loan and then lose your job and be in foreclosure and no one regulated the banks like they should of.

Now that being said, in a crisis it is so easy to look for someone to blame, become angry, and forget who we are. So my advice the next time you are at your kitchen table wondering how you are going to make ends meet, that you remember who you are, an American. I would also advise getting some debt management help.

So please, instead of running around with your hands up in the air thinking the worst and claiming the sky is falling, try listening to the Star Spangled Banner or something that is positive. I have found that this helps me a lot.

Now let us all take a good long look in the mirror, have a little faith in ourselves as a country and stop beating up on each other. Have a good day everyone and God Bless America.

5. I give what I can to the food banks and my church etc. to help those who need help.

Now let us all take a good long look in the mirror, have a little faith in ourselves as a country and stop beating up on each other. Have a good day everyone and God Bless America.

One of the more ridiculous statements going around over the last few weeks is "this is an Obama bear market." This statement is, well, ill-informed at best and fraudulent at worst. Let's look at why.

First -- who is saying this? Such economic luminaries as John Hawkins at Right Wing News (who actually asked Is Obama Deliberately Tanking the Stock Market?), Powerline, Brit Hume along with a host of other right wing bloggers. What all of these people have in common is their incessant chearleading during the Bush years despite mounting evidence of an upcoming recession. There are the same people who argued that ... housing is a small part of the economy ... most people are paying their mortgages ... the US economy will decouple from the rest of the world .... it's the greatest story never told ..... you get the idea. Simply put, these are people who have distinguished themselves by being some of the best contrary indicators around.

Secondly, the SPYs -- the tracking ETF for the S&P 500 -- dropped from (roughly) 155 in the summer of 2007 to (roughly) 85 at the end of last year. Yet I don't remember any of them saying that was the Bush bear market -- even though that's a drop of roughly 43%. No -- it's the new President that's causing the problems. In addition, when Bush took office the SPYs dropped from roughly 130 at the begging of 2001 to 85 in the fourth quarter of 2002. Yet somehow I don't think any of them blamed Bush's policies for the drop. Then it was the "lasting effects of the Clinton recession" or something similar.

What all of these idiots are forgetting is the simple fact that the economy is the backdrop of the stock market. When the economy does well the stock market does well. When the economy doesn't do well, the stock market doesn't do well. And to that end, the economy isn't doing well right now. Let's look at some recent news events.

From the BEA:

Real gross domestic product -- the output of goods and services produced by labor and propertylocated in the United States -- decreased at an annual rate of 6.2 percent in the fourth quarter of 2008,(that is, from the third quarter to the fourth quarter), according to preliminary estimates released by theBureau of Economic Analysis. In the third quarter, real GDP decreased 0.5 percent.

From the BLS:

Nonfarm payroll employment continued to fall sharply in February (-651,000), and the unemployment rate rose from 7.6 to 8.1 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment has declined by 2.6 million in the past 4 months. In February, job losses were large and widespread across nearly all major industry sectors.

From the Federal Reserve:

Reports from the twelve Federal Reserve Districts suggest that national economic conditions deteriorated further during the reporting period of January through late February. Ten of the twelve reports indicated weaker conditions or declines in economic activity; the exceptions were Philadelphia and Chicago, which reported that their regional economies "remained weak." The deterioration was broad based, with only a few sectors such as basic food production and pharmaceuticals appearing to be exceptions. Looking ahead, contacts from various Districts rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010.

Consumer spending remained sluggish on net, although many Districts noted some improvement in January and February compared with a dismal holiday spending season. Travel and tourist activity fell noticeably in key destinations, as did activity for a wide range of nonfinancial services, with substantial job cuts noted in many instances. Reports on manufacturing activity suggested steep declines in activity in some sectors and pronounced declines overall. Conditions weakened somewhat for agricultural producers and substantially for extractors of natural resources, with reduced global demand cited as an underlying determinant in both cases. Markets for residential real estate remained largely stagnant, with only minimal and scattered signs of stabilization emerging in some areas, while demand for commercial real estate weakened significantly. Reports from banks and other financial institutions indicated further drops in business loan demand, a slight deterioration in credit quality for businesses and households, and continued tight credit availability.

From the FDIC:

Expenses associated with rising loan losses and declining asset values overwhelmed revenues in the fourth quarter of 2008, producing a net loss of $26.2 billion at insured commercial banks and savings institutions. This is the first time since the fourth quarter of 1990 that the industry has posted an aggregate net loss for a quarter. The ?0.77 percent quarterly return on assets (ROA) is the worst since the ?1.10 percent in the second quarter of 1987. A year ago, the industry reported $575 million in profits and an ROA of 0.02 percent. High expenses for loan-loss provisions, sizable losses in trading accounts, and large writedowns of goodwill and other assets all contributed to the industry's net loss. A few very large losses were reported during the quarter-four institutions accounted for half of the total industry loss-but earnings problems were widespread. Almost one out of every three institutions (32 percent) reported a net loss in the fourth quarter. Only 36 percent of institutions reported year-over-year increases in quarterly earnings, and only 34 percent reported higher quarterly ROAs.

I could go on, but you you get the idea. The news of the underlying economy has been terrible (at best). And that's what's causing the problems.

Democrats own congress....... they are the ones responsible for the complete mess of this economy. But because there is a republican president, the republicans get the blame.

Republican president really can't get anything done with an all democrat congress.

Mr. President. This is the biggest problem I have with Barrack Obama. He is all about implementing his personal agenda and making us all dependent on government while it grows bigger and bigger that he doesn't stop to think about the consequences that these actions will have on our already horrible economy. All he talks about are the jobs he has created or saved and I'm sorry.....but I don't see that from where I'm sitting. I see people all around me losing jobs or about to lose jobs and cap and trade will most definitely cause more job loss.

Let our economy fix itself, Mr. President, and then we can talk about your personal agenda. Any person who wants to raise taxes during a recession is a complete and utter moron. Obama is doing nothing but hurting the middle class....which is the class he professed to want to help so badly.

I have no doubt that Obama is smart or he wouldn't be where he is at. However, I think he lacks the experience to be our president. I personally feel that any person wanting to be president of the US should be required to have run or owned a business in the past.

I tell ya what....come 2012....I'm seriously going to be looking outside the box for our next president. Not only will I thoroughly check out the pub and dem candidate but I'm going to check out the indepedents a lot more than I ever have in the past. I think it is about time we show the two parties that they both suck and we have decided to go against both of them. Maybe that will wake them up because this going back and forth between pub and crat hasn't done us much good here lately.