Obama Calls For A Growing Thriving Middle Class!

President Obama calls for Americans to recommit to time-honored values, to heal the economy with a healthy stock market, bustling main street and a growing thriving middle class. This as opposed to the past Wall Street practices at the expense of working Americans, who were fighting harder and harder just to stay afloat.…
    . . . June

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Obama's call for help
Abby Phillip - POLITICO.com: 

President Barack Obama, in his weekly address to the nation, kicked off the Labor Day holiday weekend with a call to help rebuild the collapsing American middle class.

“This Labor Day, we should recommit ourselves to our time-honored values and to this fundamental truth: to heal our economy, we need more than a healthy stock market; we need bustling main streets and a growing, thriving middle class,” Obama said.

Obama said that the deep, lingering recession has dealt a hard blow to middle-income earners who had once made the American economy 'the envy of the world.” But he added that, even before the current recession began, “the values of hard work and responsibility that build this country had been given short shrift” in the recent past.

“For a decade, middle class families felt the sting of stagnant incomes and declining economic security,” Obama said. “Wall Street firms turned huge profits by taking, in some cases, reckless risks and cutting corners. All of this came at the expense of working Americans, who were fighting harder and harder just to stay afloat .…Ultimately, the house of cards collapsed.”

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Ben Bernanke Says Feds Will Boost Economic Recovery

US Federal Reserve chairman Ben Bernanke 

So the Federal Reserve is going to help prop up the soft economic recovery. That's OK, since they plan on using some of the proceeds from the mortgage securities. I guess it's going to take a while longer before everyone can breathe a sigh of relief. It took a while getting here and it's not over yet. Below is an article from the BBC News on their reaction to this proposed change.

June

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US Federal Reserve Takes Step To Boost Recovery
 10 August 2010 Last updated at 16:24 ET

US Federal Reserve chairman Ben Bernanke The Fed said economic recovery was likely to be "more modest" in the short term

The US Federal Reserve has taken a step towards boosting economic recovery, by saying it will use proceeds from its investments in mortgage securities to buy longer-term government debt.

There had been speculation that it may choose to revive the "quantitative easing" (QE) scheme, pumping in more money to prop up a softening recovery.

The option it has taken has been dubbed "QE lite" by some commentators.

The Fed also kept interest rates unchanged at between zero and 0.25%.

Stock markets recovered some of their earlier losses after investors reacted positively but still cautiously to the news.

The Dow Jones index, down about 100 points before the Fed announcement, was only 15 points lower shortly afterwards. It closed down 54 to 10,644.

US government bond prices also rose.

Constraints on spending

In a statement, the Fed said the pace of recovery had slowed in recent months and is likely to be "more modest in the near term than had been anticipated".

"Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit," the central bank said.

Some analysts say the move could mean that money can be borrowed cheaply for a longer period of time.

"The Fed's investments in longer-dated Treasury debt should... lower mortgage and other borrowing rates," Stephen Gallagher and Aneta Markowska from Societe Generale commented.

Others believe the Fed will have to take further steps in the coming months.

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Should the Fed take more steps to boost the economic growth in the coming months?  Maybe lower the interest rates?


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June