In a clear sign investors are not impressed with the Obama administration’s economic stimulus plan that involves generating nearly $1 trillion in new government debt, the Dow Jones Industrial Average today dipped under the benchmark 8,000 level.
The DJIA closed tonight at 8,000.86, down 148.15 points, for a loss on the day of 1.82 percent.
In trading late this week the DJIA threw off an attempted midweek rally when the stock market surged 200.72 points on Wednesday to close at 8,375.45, the high point for the week.
Today’s trading was depressed by news the U.S. gross domestic product, or GDP, shrank 3.8 percent, the most since 1982, as consumer spending recorded the worst slide since the end of World War II, according to Bloomberg.
The week also saw Labor Department reports that the number of people continuing to receive unemployment insurance climb to nearly 4.8 million people, the highest level on Labor Department records dating back to 1967, according to Reuters.
In France and Germany, angry economic protesters took to the streets to raise vocal objections to how the global economic slowdown is hitting them.
Gary Ryder, the general secretary of the International Trade Union Confederation, warned the World Economic Forum in Davos, Switzerland, that the current economic turmoil had triggered a social time bomb that could lead to deepening civil unrest and soaring crime worldwide, according to the Times OnLine.
Ryder warned that globally more than 50 million jobs could be lost this year and more than 200 million people would be driven into absolute poverty.
At the World Economic Forum, New York University economist Nouriel Roubini warned, “The risk of a near-depression shouldn’t be underestimated.”
WND reported Klaus Schwab, the founder of the World Economic Forum, issued a call to utilize the current global economic crisis as a panic in which governments can move to nationalize banks.
Schwab specifically said the global economic slowdown is a “transformational crisis” that should be utilized to shape a “new world.”
As the week progressed, there were increasing signs support for the Obama economic stimulus program was eroding, not only in Congress, but among the public at large.
Rasmussen reported public support for the Obama economic stimulus plan fell this week to a low of 42 percent, after the measure passed the House with all Republicans voting against the measure and 12 Democrats bolting from Obama to vote “No.”
All through the week, critics attacked the Obama economic stimulus plan, pointing out billions of dollars that had more to do with promoting Democratic Party causes than investing in programs that would create enough jobs to jolt the nation out of recession.
In addition to millions allocated for programs such as House Speaker Nancy Pelosi’s contraception plan, which she argued would help the economy by reducing the need for the states to spend social welfare funds on babies born in unwanted pregnancies, Obama’s plan as voted out of the House included funds for education on sexually transmitted diseases and for research on climate change issues.
Among other questionable items in the economic stimulus bill are $1 billion for problems that may arise in the 2010 Census yet to be taken, $88 million to help move the Public Health Service into a new building in 2010, and $870 million to combat the flu, according to the Associated Press.
Moreover, in the Senate, the bill is likely to draw concern over adding nearly $1 trillion to the national debt, which at the end of the Bush administration topped $10 trillion for the first time in U.S. history.
As the U.S. Congress moves toward passing nearly a $1 trillion in new U.S. debt passed as an Obama “economic stimulus package,” gold closed Friday at $928.70/ounce in a week-long rally that made $1,000/ounce look like a possibility soon.
The week also saw the euro decline as the dollar advanced, with the dollar closing on Friday at $1.28/euro.
The euro decline alarmed billionaire investor George Soros, who declared from Davos that the euro might not “survive,” unless the European Union pushes for a global plan to deal with the toxic debt assets held by financial institutions worldwide, according to Bloomberg.
All week, Soros joined with other globalists at Davos in proclaiming a need for the United States to follow Sweden’s model in the 1990s of nationalizing banks after allowing the current private owners of the banks to take the hit for the trillions in worthless Collateralized Debt Obligations the banks hold in their portfolios.
The other theme Soros championed all week was that the world economic community needs governmental structures capable of regulating the world economy on a global basis.
In advancing this theme, Soros underscored that economic structures such as the World Trade Organization, or WTO, and the North American Free Trade Act, or NAFTA, were only the prelude to a governmental regulatory structure that ultimately will include regional, if not global, central banks and bureaucratic regulators setting the administrative rules by which “free trade” markets will operate.
The Obama administration has staked a lot of its first 100-days capital on getting this measure through Congress.
Yet, the stock market reaction this week caused January to end at a loss, sending a clear message to the White House that President Obama will be judged not simply by the administration’s ability to get legislation through Congress, but upon whether or not the legislation could deliver, as promised.
As this last full week in January ended, the White House appeared increasingly unable to prove to Congress or the American people whether or not the proposed economic stimulus package could possibly create enough jobs to lift the economy out of recession, even if $1 trillion in new debt were created.
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