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Banks: Democrats’ stimulus plan may be insufficient

January 26, 2009 by  

The stimulus package may not work as plannedResearchers from major U.S. banks claim that the impact of the proposed stimulus package may be smaller than meets the eye.

Alec Phillips, an economist at Goldman Sachs, was quoted by Reuters as saying that of the $825 billion package under consideration by Congress, only about $250 billion will make it into the economy in 2009.

His assessments are echoed by Richard Berner, from Morgan Stanley, who believes that the Obama team’s economic policy proposals – which rely on a mix of tax cuts and higher spending – "don’t get to the causes of this downturn – they mainly tackle its symptoms," according to the news service.

Barack Obama pledged to make an economic stimulus package a top priority of his new presidency – and still hopes to push relevant legislation through by mid-February – but recent reports indicate that he is facing mounting opposition from the Republicans.

And voices calling for the government to set up a "bad loans" bank to collect all the toxic debt are growing increasingly louder.

As the debate continues, on Wall Street bank shares have hit historic lows, with such erstwhile giants as Goldman Sachs trading at less than 40 percent of its value compared to last year.

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  • Sherian

    Why can’t anybody see the real problem with America? It’s called
    “Corporate America and their Greed”. They took the jobs out of America so that they could stuff their pockets with cheap labor abroad and when our Americans are put our of work and can’t buy cheap oversea products, then they want the American taxpayer to bail them out so they can what: buy $87,000.00 rugs and go on expensive vacations at the expense of the poor and middle class. America is failing and it’s nobody’s fault But Corporate America, Wall Street and the Congress with their lobbiest. Remember HISTORY has a way of repeating it’s self. I wonder how much an $87,000.00 rug would feed the poor children of America and give them some medical treatment or help the homeless? SHAME ON CORPORATE AMERICA and WALL STREET and CONGRESS

    • http://aol Kathie Roberts

      Yes-History does have a way of repeating itself and theres a verse in the Bible that says ”To much that is given -much will be required.”
      Thet may get away with all there spending for now-but things will catch up with even them someday.

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