Congress ready with second stimulus package

Apparently the U.S. House of Representatives is looking to get another stimulus package going. In the wake of a financial meltdown, the U.S. Government has decided to act forcefully and take a stand against the forces buffeting the U.S. economy (I’m sure you can sense the sarcasm).

How much is Congress planning to spend in its grand scheme to bail Americas out of the biggest financial crisis in 80 years? $50 billion.

The House of Representatives plans to debate legislation this month to inject another $50 billion of stimulus into the faltering U.S. economy, mostly with the goal of creating new jobs, a senior House Democratic aide said on Monday.

Amid fears of wider economic damage from turmoil on Wall Street, the roughly $50 billion would aim to spark needed road, bridge and other construction projects that help create jobs, with details still being worked out, the aide said.

The money also would be used to help low-income families pay winter heating bills and to extend unemployment benefits.

Early this year, a $168 billion economic stimulus measure was enacted.

Democrats also hope to include in this second economic stimulus measure more aid to states that are facing higher Medicaid health care costs.

“Jobs, jobs, jobs. That’s what it’s about,” according to the aide, who said the bulk of the stimulus money would be for creating new jobs.

Sen. Carl Levin, a Michigan Democrat, also told reporters that an economic stimulus plan he wants the Senate to pass is “in the ballpark” of $50 billion.

The Bush administration and Congress worked together to pass the first economic stimulus law. So far, the White House is resisting a second one.

If this weren’t a true story, it would make for good comedy. Does Congress think this is going get the job done?

The U.S. is going to need a lot more stimulus than $50 billion and I must wonder if temporary stimulus packages are money well spent. Perhaps Congress would serve taxpayers better by focusing on an orderly resolution to the financial market turmoil than in ridiculous stimulus packages. But then again, this is what I expected.


Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.