Bernanke Says Federal Reserve Ready to Further Stimulate the Economy

From LATimes.com:

Federal Reserve Chairman Ben S. Bernanke on Friday laid out a case for the central bank to take further action to bolster growth, citing the risks of prolonged high unemployment and a U.S. economy slipping into a deflationary spiral.

In a much-anticipated speech in Boston, Bernanke did not spell out details of how and when the Fed would take action. But the first option that he mentioned was a program of buying additional assets, namely government bonds, in an effort to drive down long-term interest rates and stimulate economic growth.

The central bank is widely expected to announce such a program, known as quantitative easing, at the conclusion of its next policymakers' meeting on Nov. 2 and 3.

"There would appear to be a case for further action," he said at a conference sponsored by the Federal Reserve Bank of Boston.

As Bernanke spoke, the government released statistics showing the so-called core inflation rate, which excludes volatile energy and food prices, was unchanged in September and is now running at an annual rate of 0.8% — well below the Fed's informal desired target of 1.5% to 2%. Separately, there was better-than-expected news on last month's retail sales activity as total sales rose 0.6% from the prior month, boosted by higher auto sales.

Signs of the Stimulus

We have all seen those signs at road construction sites letting us know that are tax dollars are being put to use. Some of these signs are for your local taxes, and others promote the American Recovery and Reinvestment Act. What you may not realize is how much money is being spent on these signs, and who is really paying for it. Check out the following article from ABC News on the topic below.

As the midterm election season approaches, new road signs are popping up everywhere – millions of dollars worth of signs touting "The American Reinvestment and Recovery Act" and reminding passers-by that the program is "Putting America Back to Work."

On the road leading to Dulles Airport outside Washington, DC there's a 10' x 11' road sign touting a runway improvement project funded by the federal stimulus. The project cost nearly $15 million and has created 17 jobs, according to recovery.gov.

However, there's another number that caught the eye of ABC News: $10,000. That's how much money the Washington Airports Authority tells ABC News it spent to make and install the sign – a single sign – announcing that the project is "Funded by The American Reinvestment and Recovery Act" and is "Putting America Back to Work." The money for the sign was taken out of the budget for the runway improvement project.

ABC News has reached out to a number of states about spending on stimulus signs and learned the state of Illinois has spent $650,000 on about 950 signs and Pennsylvania has spent $157,000 on 70 signs. Other states, like Virginia, Vermont, and Arizona do not sanction any signs.

Continue reading at ABC News.com…

For-Profit Colleges Reap Big Benefit from Stimulus

From ACJ.com:

Massage and beauty schools, online universities and other for-profit colleges in Georgia and across the nation are cashing in on federal stimulus spending, collecting $2.2 billion in tuition grants for low-income students, public records show.

That represents nearly a quarter of the stimulus money spent on these grants to date.

The taxpayer-funded grants are flowing to profit-making schools as the government is seeking to revise how those schools qualify for federal aid, partly because of concerns over how some saddle their students with substantial debt. The effort follows a federal report that cited abuses in the recruiting practices of some of the schools.

Georgia’s public colleges, meanwhile, are grappling with deep state budget cuts that are expected to increase tuition costs and class sizes. Some state officials would like to see more stimulus money come to those schools.

Finding the Facts in the Stimulus Debate

It has been about one year since President Barack Obama signed the well-known American Recovery and Reinvestment Act. Taxpayers across the country are asking where the money has gone, how much is left, and what has been accomplished due to the spending. DailyFinance.com put together a post with answers to these questions, and a few facts surrounding the stimulus debate. Check out a section of the article below, or head over to DailyFinance.com for the full text.

Facts are sometimes a casualty in the struggle for power. This comes to mind in the discussion of President Obama's biggest legislative accomplishment, the $787 billion stimulus bill -- more formally called the American Recovery and Reinvestment Act (ARRA) -- which he signed into law about a year ago.

Given the intensity of emotions on either side of the debate over the value of the ARRA, it is worth finding some factual answers to the most basic questions about the program. For example, how much of the stimulus money has actually been spent? How many jobs has that money created? How much remains to be spent and how many more jobs will it create?

Finding Some Answers

The answer to the first question is that over a third of the money has already been paid out. According to Recovery.gov, of the $787 billion ARRA, $272.2 billion or 34.6% of the funds had been paid out by the end of January 2010. That money has been spent in three areas: $105 billion (38.6%) on entitlements -- such as unemployment benefits, $92.8 billion (34.1%) on tax benefits, and $74.4 billion (27.3%) on contracts, grants and loans.

The number of jobs that the stimulus has saved or created is in dispute. According to The New York Times, the nonpartisan Congressional Budget Office (CBO) estimates that ARRA has saved or created between 900,000 and 2.3 million jobs. Why the big range? The answer is in the growth assumptions used. CBO Director Douglas W. Elmendorf testified to Congress in January 2009 that the number of jobs created by ARRA would vary depending on how much additional economic output it produced -- which he assumed would range from 1.3% and 3.6% in 2009. The more output, the more jobs created.

Continue reading at Daily Finance.com…