EconomicsUSA: Stimulus: Had great positive impact, benefit crested and now is waning

The AGC email newsletter, SmartBrief for Aug25,2k10, is of course published by the Associated General Contractors of America; today it alerted us in this compact item, a tabbed segment "Market Update" (notice tab to the left as you scroll down):

Stimulus package pricier than previously thought

The federal economic-stimulus package is turning out to be costlier than originally estimated. The cost of the package, pegged at $787 billion in January 2009, has risen to $814 billion, according to a new congressional analysis. The analysis said that the stimulus has saved or created between 1.4 million and 3.3 million jobs and increased gross domestic product by as much as 4.5%. NYT (free registration)/The Associated Press (8/25)

NYT, you'll notice, attributes authorship only to the Associated Press, so it woud seem that a certain anonymity obtains in this instance. But the article is fascinating:

Stimulus to Cost $27B More Than Original Pricetag (Aug24,2K10). Filed at 6:06 p.m. ET.

WASHINGTON (AP) -- President Barack Obama's massive stimulus measure has created or saved as many as 3.3 million jobs and continues to boost economic growth in the second half of 2010, but it's come at a higher pricetag than originally billed.

Congressional analysts released new figures Tuesday estimating that the law enacted in January of 2009 -- then projected to cost $787 billion over a decade -- would cost $814 billion. That's still lower than the Congressional Budget Office estimated in January, when it said the measure would cost $862 billion.

The report comes 10 weeks before midterm congressional elections in which Republicans are hammering Democrats and Obama on the economy, charging they've pushed runaway spending without creating promised jobs.

The analysis credits the stimulus measure with increasing the number of people employed somewhere between 1.4 million and 3.3 million jobs between April and June -- and boosting the gross domestic product by as much as 4.5 percent. The figures are slightly less rosy than the picture Obama's economic advisers painted last month, when they said the stimulus law had ''raised employment by 2.5-to-3.6 million relative to what it otherwise would have been'' during that period.

So we've now got an upward trend up in many economic sectors, and in diverse industries, the vaunted "Recovery," and the whole picture immersed in the color of joblessness. And the grinding ongoing creation of "discouraged workers" who stop even looking for jobs.

Not good enuff!, President Obama.

--EconoMix

See recent post on key indicator/s of economic health.

International: Economy: Bailout billions paid to French & German big banks by AIG

BBC's business editor, Robert Peston, blogs on the nexus between these corporate entities: Goldman Sachs (USA), American International Group (USA), Societe General (France), Deutsche Bank (German), and Barclays (Brit)... "and the whole world" (quips Fox's early morning show host Doucey) -- all these, say Peston and Doucey, were getting paid off by AIG with tax monies. "The Goldman infallibility myth" (Mar16,2k9).

Economics USA: Half a million lost jobs in November 2008

In what seems to be the largest figure for job losses since the Seventies among American workers --533,000 across the month of November -- translates to an unemployment rate of 6.7% of the workforce.

This month, the figure and rate will probably rise (at least marginally). Were that not sufficient a problem in itself, we must also keep in mind that people going thru job loss are likely to be "the lowly borrower at risk of foreclosure" as well. Christian Science Monitor's Mark Trumbull article "Housing: the key to economic survival" (Dec12,2k8) lays out the landscape:

The problem reached a stark milestone last week, as the Mortgage Bankers Association reported that 1 in 10 mortgage holders is either in foreclosure or at least a month late on payments.

President-elect Obama, the Democratic-controlled Congress, and the independent Federal Reserve are all considering new ways to stabilize the housing market.

But attention has already turned away from the loan defaulters, especially those trying to keep up with their monthly payments (mortgaged home-owners), political attention re-focusing itself on a bailout of the "Big Three" American-owned automakers. The specific kind of jeopardy that goes with a jobless worker losing a house, is not identical to that of an autoworker losing a job but getting bailed out in some fashion or other (compensation for early retirement and other schemes to reduce the workforce of Ford, General Motors, and Chrysler).

A few days earlier, "Ouch! Borrowers Keep Defaulting After Mortgage Modification" by John Carney (Dec8,2k8, ClusterStock via Yahoo! Finance) reports:

36% of borrowers who had their loans modified in the first two quarters of 2008 re-defaulted after just 3 months. After six months, the redefault rate was roughly 56%. After eight months, 58% of borrowers re-defaulted.

These three inter-related trends are not going to reverse themselves, or shift into reversal as a result of government action in the short run.

Economix