Economic Recovery Measures
Yesterday, Treasury announced that it would be selling its 6.6 percent equity stake in Chrysler to Fiat, which represents the last outstanding TARP investment in the company, which has been receiving assistance from the program since January 2009.
In early 2009, lawmakers enacted an economic stimulus package to help stem the economic freefall which was shedding hundreds of thousands of jobs per month as the unemployment rate was on a quick climb towards ten percent. Regardless of the merits or size of a fiscal stimulus package, we at CRFB warned against supposedly temporary provisions lasting much longer than the stimulus dictated.
Meet Kate, a fictitious 41 year old Generation X member. How will our leaders’ fiscal choices affect her life? In our fifth and final installment of our “Meet the Generations” series, we look at Kate’s fiscal future, based on the two alternative futures scenarios from our recent paper “America’s Fiscal Choices at a Crossroad: the Human Side of the Fiscal Crisis”.
Brackets – As many busy themselves today going over the brackets for the big tourney, picking the next Cinderella and who will win it all, the real challenge for prognosticators remains predicting how the budget impasse will pan out. The budget process has gotten uglier than the 68 team bracket and all the moving parts – FY 2011 spending, the FY 2012 budget and the debt limit – make the road to Houston look like an easy jaunt.
While the budget world is caught up in the President's budget, it's time to celebrate an important birthday. On this day two years ago, President Obama signed into law the American Recovery and Reinvestment Act (ARRA), which provided $821 billion in spending and tax cuts over ten years, although most of these funds were targeted for the first three years. (Previous estimates from CBO have put the cost initially at $787 billion, then $862, then $814.)
Last month, we reported the positive developments that were happening with the major players--GM, Citigroup, and AIG--still left in the Troubled Asset Relief Program (TARP). In November, Citigroup had fully repaid all the assistance it had received in various TARP programs, GM had significantly reduced Treasury's ownership stake in itself, and AIG was in the process of an exit plan.
Yesterday the Federal Reserve announced it would be paying a record $78.4 billion to the U.S. Treasury for 2010. It accumulated this large sum from interest on its holdings of risky assets, like mortgage-backed securities, that it acquired during the financial crisis. The Fed's policy dictates that it turn over this money to the Treasury at the end of each year.
With the Senate getting past a procedural vote in approving the tax deal, it appears more and more likely that this deal will soon become law.