Economic Recovery Measures
According to the Bureau of Labor Statistics’ monthly report, the unemployment rate made a stunning leap in October from 9.8% in September to 10.2%, the highest rate since April 1983. Since the recession started almost two years ago, employment has declined by 7.3 million.
UPDATE: The Senate has passed a bill to extend jobless benefits, a bill which also includes the extension in the homebuyer tax credit and carry-back period for losses.
Yesterday, the Congressional Budget Office put out An Overview of Federal Support for Housing. In the report, CBO outlined the nearly $300 billion in housing-related spending and tax breaks offered this year.
Recently, the government has undertaken extraordinary efforts to help prop up the housing sector. Interestingly enough, though, most of our support for the sector has nothing to do with the current economic crisis, and has been in place for decades.
On Friday evening, the FDIC reported that it has taken over an additional nine banks (FDIC Closes Nine Banks) for a cost to the FDIC of around $2.5 billion. This brings the total number of failed banks in 2009 to 115. Total deposits of all failed banks now equal $104.7 billion for 2009 and over $338 billion since the beginning of 2008, all at an estimated cost to the FDIC of over $51 billion.
Here are the highlights from this weekend’s editorials on fiscal and budget policy:
A number of very interesting and relevant reports have come out of the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) this week. Check them out:
The Senate has reached a consensus on the issue of extending the homebuyer’s tax credit, first implemented in the stimulus bill. The tax credit was enacted early last year to help provide a boost for the housing market. While officials in the real estate industry and other supporters have claimed that it has helped to boost sales and clear out an overabundance of lower priced homes, critics have argued that most of those people would have bought homes anyway.
The General Motors Acceptance Corporation (GMAC), previously owned by General Motors, has offered $2.9 billion of three-year bonds in the private debt market. Through TARP, the government has already provided $12.5 billion in capital for GMAC, a consumer lending company, at an estimated cost of over $9 billion to taxpayers.
Update: Yesterday evening, Senators voted 87-13 to cut off debate to the unemployment insurance bill, which prevented the consideration of amendments to extend expiring stimulus provisions. Some of those amendments, supported by Senators on both sides of the aisle, would have extended the homebuyer's tax credit. Final passage of the bill is expected later this week.