Recently, on "Meet the Press", Timothy Geitner touched on the U.S. economy’s increase, banking stability and lagging employment growth.
Geitner ran with the news announced last week, that the U.S. GDP grew 3.5% in the Q3 2009, and, went on to describe the recovery as “uneven” and “choppy”. In Q3 2009, Cash for Clunkers and the tax credits for first-time homebuyers dominated stimulus package’s priority. According to leading economists, including David Wyss, the suggested impact of the stimulus package on the growth is estimated at about half of the 3.5%. Is the forecasted seesawing of economic growth primarily related to the effectiveness and volume of the stimulus package? When the current stimulus package ends, will a second be necessary? According to Recovery.org, only 207.3 of the 787 (Boeing omen?) billion or 26.3% of the stimulus package is paid out as of October 30th, 2009. Also, keep in mind, the growth we are trying to establish will not be reminiscent of the growth we received as a result of unethical loan practices; and, perhaps, we have still have some contracting to do before we burn through all the toxic loans that were handed out among other things.
As for the banking system, Geitner labeled it, “dramatically more stable.” Stable compared to the system handing out high-interest loans to under qualified applicants to buy houses they cannot afford? If that is the comparison, than I find contestability in the use of word “stability” within any statement regarding the banking system. Good thing I keep my money at California National… What? Oh… That’s not good.
Lastly, the U.S. unemployment rate of 9.8% is a 26-year high; nowhere to go but up, right? Well, forecasts predict an increase to over 10% before estimated recovery will occur. Geitner said, “You’re not going to see a real recovery until it’s led by the private sector […].” With the stimulus package being the primary reason for economic growth, private growth appears to be on a horizon; unfortunately, that horizon seems like a mirage.