White House Calls for Second Stimulus

From the FT:

The Obama administration made a strong plea to Congress on Monday to grit its teeth and pass a new set of spending measures – dubbed the “second stimulus” by some economists – in order to help dig the economy “out of a deep valley”.

The call for action, which was made by Lawrence Summers, Barack Obama’s senior economic adviser, who urged Congress to pass up to $200bn (£138.9bn) in spending measures, came at the same time as Mr Obama asked Capitol Hill to grant him powers to cut “unnecessary spending”.

The combined announcements were made amid rising concern that centrist Democrats, or those representing marginal districts, might vote against the spending measures, which include more loans for small businesses, an extension of unemployment insurance and aid to states to prevent hundreds of thousands more teachers from being laid off.

The move comes at a time when last year’s $787bn stimulus is wearing off. Mr Summers argued that it would be a premature move at this stage in the cycle to move to fiscal discipline. “I cannot agree with those who suggest that it somehow threatens the future to provide truly temporary, high-bang-for-the-buck jobs and growth measures,” he said. “Spurring growth, if we can achieve it, is by far the best way to improve our fiscal position.”

Let's hope Congress can do the right thing and pass this with a heavy emphasis on infra-structure spending.

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Hank Paulson -- Comedian

From the AP

Homeowners threatened with foreclosure would in some instances get a 30-day reprieve under a new initiative the Bush administration announced Tuesday.

Dubbed "Project Lifeline," the new program will be available to people who have taken out all types of mortgages, not just the high-cost subprime loans that have been the focus on previous relief efforts.

The program was put together by six of the nation's largest financial institutions, which service almost 50 percent of the nation's mortgages.

These lenders say they will contact homeowners who are 90 or more days overdue on their monthly mortgage payments. They will be given the opportunity to put the foreclosure process on pause for 30 days while the lenders try to work out a way to make the mortgage more affordable to the homeowner.

Folks -- these borrowers are already 90 days behind. What does that tell you? They're poor credit risks. The chances of finding a solution are, well, pretty grim.

Here's what all of these guys should do if they are sincere in their desire to solve this problem. Go back over their records and look for anybody that was given a loan they probably shouldn't have. That's what they need to do to prove they want to make this a smaller problem.

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