Economic Recovery Measures
CBO has issued new numbers for the total costs of the Troubled Asset Relief Program (TARP). CBO now estimates that TARP will cost $25 billion over the life of the program. This is down $41 billion from CBO's previous estimate of $66 billion in their August 2010 Budget and Economic Outlook, $84 billion less than CBO's March 2010 estimate, and $88 billion less than OMB's most recent analysis (which relies on data up to May 31, 2010).
CBO gives the reasoning as to why the cost estimate has gone down over the past year:
You might have missed it last week if you were preparing to chow down on some turkey, but Our Fiscal Security (OFS)--a joint project of the Economic Policy Institute, Demos, and the Century Foundation--became another in a long list of groups/experts to put out a specific proposal for our long-term fiscal situation.
Noted economist Brad DeLong is asking: where are the technocrats of the center? In a recent blog post, he laments the lack of a concrete plan among more centrist technocrats to get the economy going in the near-term while, at the same time leaving it better off in the long-run. He outlined a seven-point plan to accomplish this goal:
As widely expected (and priced into the markets), the Fed decided at its monetary policy committee meeting today that it would increase purchases of Treasury securities to boost the weak economy.
Bob Rubin, former Clinton Treasury Secretary, had an opinion piece in the Financial Times on Monday that made a lot of points we certainly agree with. Some of his major points (emphasis ours):
“Virtually all advanced economies are likely to conduct fiscal consolidation at some point in the future to put their fiscal positions back on a sustainable footing.” - International Monetary Fund, World Economic Outlook, October 2010, p.21
The United States, like a number of other countries, needs to figure out how to best design a fiscal recovery package that will not derail a lackluster recovery, while at the same time, phases in debt reduction policies soon enough and aggressively enough to reassure credit markets.
In an op-ed in today’s Wall Street Journal, Alan Blinder discusses his frustrations with what he dubs the “fiscal policy paradox”: that the economy-boosting “policies that might work won’t be tried,” due to partisan infighting, and the “policies that will be tried might not work.” He laments that fiscal policy has largely been on the sidelines while monetary policy undertaken by the Federal Reserve has done most of the heavy lif
Update: This blog has been updated to reflect additional information.
On Stimulus.org, we have been tracking the number of bank failures by FDIC-insured institutions since the beginning of 2008. As we have mentioned before, due to the financial crisis, the number of bank failures and their cost in each of the past three years has completely dwarfed the numbers from the prior eight years.