Households, Businesses Have Stopped Spending; Now It’s Congressional Responsibility Time

Here is the top economic news today:

–Unemployment reached a level not seen since 1983.

–The stock market hasn’t been this low since 1997.

–The Senate refused the president’s $410 billion omnibus spending bill last night, necessitating a continuing resolution at last year’s spending levels, at least until the omnibus can be reconsidered next week.

–The Republican Leader in the House, John Boehner, has called for a government spending freeze.

–The head of the Federal Deposit Insurance Corporation (FDIC) has warned that the fund insuring Americans’ bank deposits could be wiped out this year without the money the agency is seeking in new fees from U.S. banks and thrifts.

–The Treasury Secretary’s pick as his number one deputy withdrew her name from consideration last night.  The top 17 senior posts at Treasury are vacant with no names announced to fill those posts.  A Senate hearing was cancelled yesterday because Treasury could not cough up a reporesentative for the hearing.  And as for Mr. Geithner himself, Warren E. Buffett has said: “Beware of geeks bearing formulas.”

–A Record 31.8 million Americans now get food stamps.

http://money.cnn.com/2009/03/05/ne
ws/economy/foodstamps.reut/index.ht
m?section=money_latest

Worried now?  I am.  especially since President Barack Obama wants to spend untold trillions still: on health care, bank bailouts, foreclosure and mortagage subsidies, a conversion of the nation’s energy system from oil, gas and coal to wind and magic, and still more.

The president already has said mean things about the engine drivers of the American economy, and made it clear he intends to raise their taxes and cut their perks and pay.  Consequently they have decided to invest less and hire fewer worker.  You would have done the same.

All homeowners will lose some of their mortgage interest tax deduction under the Obama plan: a strange idea during a housing crisis.

And we can all expect to pay more for everything when this huge debt we are developing turns into the likely ugly dragon of inflation.  Add to that oil and gas prices which will likely rise with OPECs help and the president’s “cap and trade” idea for energy and carbon limits and PRESTO: we could have a real economic meltdown.

I’m with Republicans in the House and Senate: this is a good time to kill the 9,000 earmarks contained in the omnimbus and settle for a continuing resolution to finish out this year.

Related:

WASHINGTON (AP) — The top Republican in the House is seizing on the latest spike in unemployment to call for a freeze on government spending and to urge President Barack Obama to veto a $410 billion spending bill.

Rep. John Boehner, R-Ohio, said the jump in unemployment to 8.1 percent and the loss of 651,000 jobs in February is a sign of a worsening recession that demands better solutions from both parties.

Boehner criticized the spending bill as chocked full of wasteful, pork-barrel projects. The Senate postponed a vote on the bill until Monday amid the criticism.

Boehner said he hoped Obama would veto the bill. He urged the president to work with House Republicans to impose a spending freeze until the end of this fiscal year.

More Related:
http://michellemalkin.com/2009/03/06/hou
se-republicans-push-for-spending-freeze/

******
WASHINGTON – The head of the Federal Deposit Insurance Corp. has warned that the fund insuring Americans’ bank deposits could be wiped out this year without the money the agency is seeking in new fees from U.S. banks and thrifts.

FDIC Chairman Sheila Bair acknowledged, in a letter to bank CEOs, that the new increased fees and hefty emergency premium the agency voted to levy last week will bring a “significant expense” to banks, especially amid a recession and financial crisis when their earnings are under pressure.

“We also recognize that assessments reduce the funds that banks can lend in their communities to help revitalize the economy,” Bair wrote.

But given the accelerating bank failures that have been depleting the deposit insurance fund, she said, it “could become insolvent this year.”

Read the rest:
http://news.yahoo.com/s/ap/200903
04/ap_on_bi_ge/fdic_bank_fund_w
arning

*****

Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.

The Connecticut Democrat’s effort — which comes in response to urging from FDIC Chairman Sheila Bair, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner — would give the FDIC access to more money to rebuild its fund that insures consumers’ deposits, which have been hard hit by a string of bank failures.

Read the rest from The Wall Street Journal:
http://online.wsj.com/article/SB1236
30125365247061.html

Related:
Unemployment Highest Since 1983; Business Leaders Have No Confidence in Obama Economic Plan, Team

American Workers, Businesses Cut Back; Obama Launches Spending Spree
.
Presidency of Fear

Obama’s Brazen Deception: Why The Stock Market Won’t Recover Soon

 Senate Halts Obama Spending; At Least For The Week End

 Obama plan to prevent foreclosures won’t help many California homeowners

“People that create American wealth are going on strike”

Obama’s Economic Strategy Akin To LBJ’s Vietnam Fiasco: “Pour In More”

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