10 July 2009 - CongressmanPosey

Posey Questions Sec. Geithner on Effectiveness of Stimulus

Congressman Posey questions Treasury Secretary Tim Geithner on the effectiveness of the stimulus during a hearing of the Financial Services Committee - July ...

the gentleman from Florida mr. Posey is

now recognized Thank You mr. chairman mr. secretary I I had a couple questions I want to ask a year before our committee before and each time something came up before I got to ask my questions and so I just to put things into proper perspective I like to pose a couple of them now the the stimulus bill was advertised to reduce unemployment and help us get back on track it apparently hasn't done that I've seen some information which indicates in fact unemployment has gone up to about nine and a half percent from below eight percent instead of having the other effect and I know the vice president the other day said that it was something that the economy that no one had anticipated and that they misread the economy and I was just wondering where you think your plan went wrong congressman thank you for raising that that question the I think if you step back and look at where we are today relative to where we're at the end of the year we have achieved the critically important effect of helping slow the rate of decline in the economy help stabilize the financial system business consumer confidence have improved very

substantially the rate of decline economic global economic activity globally has slowed and stabilized financial system starting to heal cost of credit broad concern about catastrophic risk and the economy of financial sim has receded very dramatically those are critically important signs of initial progress and they are due entirely to the actions this Congress took and the administration took to put in place the largest recovery program in peacetime of the United States the stimulus package is on its expected path in terms of the rate of change and in terms of put money in the pockets of taxpayers to provide substantial forms of assistance to States to reduce the risk that they're forced to fire tens of thousands of teachers workers and firemen and there are very substantial investments in infrastructure your products that starts at have already started to take effect and will have their maximum impact on the economy in the second half of this year so my own sense is and I think this is a consensus of broad-based economists that there has been substantial improvements

in arresting what was the worst recession globally we've seen in generations and those are the result of the actions this Congress took the administration put in place and complementary actions taken by governments around the world to again help address what is the worst crisis we've seen in a long period of time let's chairman hmm the the chart just indicates the opposite it shows no I don't I don't think that's true only it's true congressman if you if you if you look at the dynamics of all recessions even as growth starts to improve and turn positive unemployment tends to continue to rise that is the inescapable natural element of recessions that is not an argument for not acting very forcefully in the face of crises of this magnitude and so I think what the Congress did what the President did was necessary and critically important again to reduce the risk that we see hundreds of thousands of further losses of jobs and we say millions of job losses beyond this point and we see thousands more businesses fail unnecessarily now you know better than they have cyclical they are anyway

the next question is we know even in our districts banks have money to lend but they're not lending it people have money to buy a new car but they're not buying them people have money to take a vacation but they're not taking them that the consumer confidence isn't what we would like it to be and the money is not getting spent and and personally I think it's because they don't know what's coming the banks are afraid to loan it they don't know what the next issue is going to be and we're looking really kind of for a plan congressman again I'm going to just repeat it with members go right to the end of the time with their question is the answer ought to be ten seconds but remembers want to have an edge children let the leave time for it which secretary briefly households the cops across the country borrowed enormous amounts of money relative income in the run-up to this crisis what the economy is going through is a necessary and very healthy adjustment as families and the government the United States goes back to living within their means that is causing a greater contraction demand for credit than we normally see in

recessions and you're seeing a very healthy increase in private savings behavior and probably in response to that I think those are necessary healthy dynamics although they will produce a slower recovery like the gentleman

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