Edwards talks stimulus package at forum

Feb. 27, 2009

By Hayley Hibbert
Reporter

United States Rep. Chet Edwards, (D-Waco), spoke Thursday via videoteleconference from Washington, D.C. about his decision to support the stimulus package.

"The Global Business Forum's theme of 'Rebuilding the Global Financial system' is very timely," Edwards said. "We are in a global economy, and we are facing some of the most significant challenges I've seen in my lifetime."

Edwards provided some statistics on the global economy as a result of the United States' financial crisis.

"As of January, the International Monetary Fund (IMF) has forecasted a 2.8% shrinkage in world trade this year, which is the first shrinkage in world trade since World War II," Edwards said.

Edwards recognized Americans' concerns with the state of the economy.

He addressed the seriousness of the situation, calling it the most serious and longest economic recession since the Great Depression.

Edwards explained that the current recession has lasted longer than anyone would have expected.

"What is different about this than a typical economic business cycle recession is that, normally, lower mortgage rates would help pull the economy out of a recession. In this case, the opposite has occurred. An increasing number of foreclosures and vacant housing is keeping us dragged down into the recession," Edwards said.

He hesitated when mentioning the number of people who lost their jobs in the last year because of the recession.

Of the 3.6 million Americans who have lost their jobs since December 2007, Edwards said 1.6 million of these have been lost in the last 90 days alone.

In order to demonstrate the severity of that number, Edwards told the audience to consider every man, woman, and child living in Waco. Multiply that number by 13, and that's how many people have become jobless in the last three months.

Edwards explained his decision to support the $789 billion stimulus package, as well as the Troubled Assets Relief Program (TARP), which allows the government to purchase assets and equity from financial institutions to strengthen the economy.

"I felt that the risk of inaction was greater than taking a chance," Edwards said.

He followed up with a breakdown of how the stimulus package will be spent.

"Of the $789 billion, 36 percent will be in the form of tax cuts," he said. "Eighteen percent will be given to states and localities, preventing them from major layoffs and 14 percent will go to infrastructure investments, for roads and modernizing hospital systems. Texas gets $2.4 billion. Schools will receive 6.4 percent, 5.8 percent goes toward new energy policies, and 18.8 percent will help struggling middle class families."

Edwards said he is unsure if the stimulus package and TARP funding will be enough, but said that the Congressional Budget Office predicted that the growth will be 2.5 to 3.5 percent greater in the next year than it would have been without the packages.

Edwards suggests several key success factors Americans must meet in order to get the economy back on stable footing.

Restructuring long-term deficits is necessary so that interest rates don't skyrocket in the future.

The United States must decrease its dependence on foreign energy sources, and it must more effectively regulate its financial institutions, he said.

Life-long Waco resident Dolores Carter said that experts have failed to mention the job market for recent college graduates.

"I see a room full of eager students, and I wonder why no one is talking about their challenges when they graduate," she said.

Edwards offered no solution, but said, "We need to get education right. We are competing with nations where people earn $2 a day. We must assure our bright students get an education and go to college."

Georgetown alumna Nicole Hanson-Emerson said, "As a recent graduate looking to find a job, it was disheartening that Edwards couldn't say when the job market will get better."

With all of the policies the United States is implementing, Dr. Stephen Gardner, director of the McBride Center for International Business and chair of the forum, says it is important to maintain a free and open trading system with the rest of the world.

"We are launching into a difficult time in this political economy," Gardner said. "The challenge for our policymakers at the national level will be to pursue policies that encourage international trade."

Edwards reiterated the crisis' global impact, and said that the decisions the United States makes during this time will shape how the rest of the world conducts business.

"For better or for worse, The United States impacts the economic situations of the rest of the world," Edwards said. "The president is working on a program that will reassure American workers that trade is vital for the health of our economies and our individual families."

In closing, Edwards made it clear that while recessions are temporary, it is difficult to tell what direction the economy will take if policies are not implemented quickly.

"Americans are resilient, strong, and innovative," Edwards said. We have a good market system, and a stronger democracy than most nations in the world. However, we face a serious recession that could get worse if we take no action."

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