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Bush: economic stimulus package is needed
Bush spoke to the nation Friday morning, asking Congress for a n economic stimulas package.
President George Bush proposed a stimulus package Friday morning designed to deal with the economic slowdown in the U.S.
"After careful consideration and discussions with Congress, I have concluded an economic stimulus package is needed," Bush said.
Bush said there should be two provisions: Tax incentives for businesses and income tax relief for individuals.
"Letting Americans keep more of their money should increase consumer spending," Bush said.He also said Congress should work quickly to send him legislation to "keep our economy growing and creating jobs."
Bush said in order to be effective, a stimulus package would have to represent about one percent of the gross domestic product. He called for about $145 billion worth of tax relief to stimulate the sagging economy.
Bay area residents weigh in
Some Bay area residents like the president's proposal.
"My wife wants a big screen TV, so that's going to be something we're going to be looking at," said Clearwater business owner Dave Firth. "So I think it's really going to help us. I really do."
Tampa Bay Business Journal editor Alexis Muellner said the plan could work to stimulate the economy.
"Everybody's been waiting for this sort of bailout and some help," Muellner said. "And it has been proven to help."
Housing slump, credit crisis are behind the proposal
Bush and Congress are scrambling to act amid mounting fears of a recession. There are concerns that a severe housing slump and a painful credit crisis could cause people to stop spending, and cause businesses to stop hiring.
The president held talks with Democratic and Republicans on Capitol Hill on Thursday as Ben Bernanke, the chairman of the Federal Reserve, warned lawmakers to waste no time enacting a fiscal stimulus package to help beleaguered consumers.
Some economists have suggested that the economy is heading into a recession or may already be in one. Stocks have plummeted this year amid worries about a recession.
The Dow Jones industrial average dropped more than 300 points Thursday after reports of slowing growth and a massive writedown by brokerage giant Merrill Lynch, which reported a nearly $10 billion loss for the fourth quarter of 2007 and wrote off more than $11 billion in bad mortgage debts.
Bush acknowledged last week that economic signals "have become increasingly mixed" in recent weeks, but warned against "aggressive" new regulations and repeated his demand that Congress permanently extend the tax cuts he pushed through in his first term.
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