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Job-Loss Figure Brings Cheer
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During a stop in St. Louis on the way to his ranch in Crawford, Tex., President Bush told business and community leaders that the benefits of the stimulus plan adopted in February are only beginning to be felt. Tax rebate payments that make up the centerpiece of the plan began appearing as direct deposits in bank accounts this week, he said.
"Since I've been president, I want to remind you that we've been through recession, we have been through a terrorist attack, we have been at war, we've had corporate scandals, we have had major natural disasters, and yet this economy always recovers," he said. "We are a resilient economy."
Democrats voiced a less sunny view. "These numbers are not as bad as they might have been, but for the administration to believe this gives them a green light for their laissez-faire, do-nothing policies would be a huge mistake," Sen. Charles E. Schumer (D-N.Y.), chairman of the Joint Economic Committee, said in a statement. "The fundamentals of this economy are not very strong, and too many Americans are still losing their jobs every day."
Part of the reason the economy is holding up better than many analysts had forecast is that financial markets have been functioning in a more orderly manner. To try to encourage that healing, the Federal Reserve yesterday expanded a program aimed at encouraging banks not to hoard cash.
The Fed increased the size of its every-other-week "term auction facility," which essentially shovels cash into the banking system, to $75 billion from $50 billion, and expanded a lending program with the European Central Bank and the Swiss National Bank, aiming to get the same effect for banks overseas.
The Fed also said it will take more types of assets as collateral at a special lending window, such that investment firms can now trade high-quality securities based on student loans for cash. Congressional leaders have pushed for the Fed to take action to bring stability to the market for student loans, and accepting these securities as collateral could do that.
Staff writer Sandhya Somashekhar, traveling with Bush, contributed to this report.
