FrankRep
03-03-2009, 05:18 AM
U.S. rescue efforts may risk double-dip recession
Reuters
Mar 2, 2009
U.S. companies, consumers and communities may grow so addicted to government financial help that cutting them off could trigger another recession soon after the current one ends.
Between the U.S. Federal Reserve's trillions of dollars in lending programs, the $787 billion stimulus package and $700 billion -- and counting -- in bank bailout funds, no one can accuse officials of soft-pedaling their crisis response.
But there is increasing concern that when the flow of public money subsides -- beginning next year when much of that stimulus package is spent -- the economy still won't be strong enough to stand on its own.
"The stuttering attempts to repair the banking and lending mechanisms so far by the new administration suggests that by late 2010, the specter of a second dip into recession will be looming large," said Merrill Lynch economist Sheryl King.
The latest evidence of the government's ever-changing plans came on Monday when insurer American International Group Inc got its third bailout, each with different terms.
That did nothing to improve confidence on Wall Street, where investors dumped stocks amid fears that the financial crisis was worsening.
...
Full Story:
http://www.reuters.com/article/ousiv/idUSTRE52168Y20090302
Reuters
Mar 2, 2009
U.S. companies, consumers and communities may grow so addicted to government financial help that cutting them off could trigger another recession soon after the current one ends.
Between the U.S. Federal Reserve's trillions of dollars in lending programs, the $787 billion stimulus package and $700 billion -- and counting -- in bank bailout funds, no one can accuse officials of soft-pedaling their crisis response.
But there is increasing concern that when the flow of public money subsides -- beginning next year when much of that stimulus package is spent -- the economy still won't be strong enough to stand on its own.
"The stuttering attempts to repair the banking and lending mechanisms so far by the new administration suggests that by late 2010, the specter of a second dip into recession will be looming large," said Merrill Lynch economist Sheryl King.
The latest evidence of the government's ever-changing plans came on Monday when insurer American International Group Inc got its third bailout, each with different terms.
That did nothing to improve confidence on Wall Street, where investors dumped stocks amid fears that the financial crisis was worsening.
...
Full Story:
http://www.reuters.com/article/ousiv/idUSTRE52168Y20090302