ben bernancke back with begging bucket

More cash needed to save economy: Bernanke
Last Updated: Monday, October 20, 2008 | 8:11 PM ET

CBC News

Washington needs to spend more cash if the global economy is to fend off a long-term slump, the chairman of the U.S. Federal Reserve Board said Monday.

Ben Bernanke told a group of U.S. representatives that Congress should look closely at passing a new stimulus package as a way of restoring confidence in the nearly moribund world banking system.

"With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate," Bernanke said in testimony before the House budget committee on Monday.

Congress currently is looking at whether to use more taxpayers' money to help out ailing banks and other financial institutions, perhaps as much as $150 billion US, according to some reports.

Many voters, however, are upset at the perceived handout for these financial institutions while the same banks and trust companies repossess the houses of defaulting mortgage holders.

So far, Congress has ponied up $700 billion in fiscal assistance to buy back almost-worthless mortgage-backed securities and invest directly in bank stocks.

Still, "we are in a serious slowdown," Bernanke said in response to a committee question.

Ignoring that reality would be bad for the economy, he said.
Bush soothes investor nerves

U.S. President George W. Bush also signalled that the U.S. economy has problems, but that the sweaty palms that characterized investors and working Americans a few days ago have been replaced by steely resolve as the government's policies begin to show positive effects.

"I have heard that people's attitudes are beginning to change, from a period of intense concerns â?? and I would call it near panic â?? to being more relaxed and beginning to see the effects of changes and the liquidity that is being pumped in the system, that we got a long way to go.

"As I said Friday, this thaw â?? took a while to thaw, it's going to take a while to unthaw. But it's â?? but the attitude here is a little different than it might have been a week ago," Bush said, speaking at an economic roundtable in Louisiana on Monday.