ECONOMY WEEKLY - WEEK OF OCTOBER 11, 2010

"We have just lived through one of the more notable successes of government intervention in modern times—the auto and bank rescues that almost surely saved the country from another Great Depression…. The government interventions worked. The companies were saved. Most of the money that taxpayers invested is likely to be repaid. Many politicians talk as if the whole process was a disaster, but it wasn't."
-David Ignatius [Washington Post, 10/14/10]
 

Economy Highlight

  • According to the Commerce Department, retail sales rose by 0.6 percent in September. “Auto sales, which had fallen 0.5 percent in August, rose 1.6 percent in September, the best showing since March.” [AP, 10/15/10]

Recovery Highlights

  • A USA Today editorial argues that the Trouble Asset Relief Program and the Recovery Act should be judged as successes. “Of the $388 billion in TARP money that was spent, more than half has already been recovered, according to the latest Treasury Department report. What's more, with GM looking healthier and even insurance giant AIG showing signs of life, it's possible that TARP could turn a profit in the end. That would make it one of the best uses of federal tax dollars in memory… Similarly, the stimulus has had a positive effect, though measurable only against a less desirable situation that might have been. It strengthened the social safety net for those cast into desperate straits and bolstered struggling states and localities. The non-partisan Congressional Budget Office estimates that 1.4 million to 3.3 million more people would be unemployed today without it.” [USA Today, 10/15/10]
  • On Wednesday, the Treasury Department reported that 8 million families received college tax credits through the Recovery Act. The average tax credit was $1,700. “The stimulus law made several changes to make the tax credits more generous.... Overall, taxpayers claimed tax incentives worth $18.2 billion for college in 2009, including both tax credits and the tuition deduction. That was a 90% increase from 2008, when taxpayers claimed $9.6 billion.” [Wall Street Journal, 10/13/10]
Posted in