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Obama Urges Steps to Strengthen Economy

October 31st, 2010 at 12:43am Under Economy Report

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This is the VOA Special English Economics Report.

This week, President Obama proposed new measures to lift the economy. The central bank in its latest report said there was continued growth in the past several weeks, but with “widespread signs” of slowing.

Congressional elections are November second. One new survey showed that forty-nine percent of likely voters think Republicans should control Congress. Other polls find that about sixty percent of Americans think the country is going in the wrong direction.

President Obama gave a speech Wednesday near Cleveland, Ohio. He proposed a tax plan for businesses that make capital improvements, like buying new equipment.

BARACK OBAMA: “And I’m proposing that all American businesses should be allowed to write off all the investment they do in 2011. And this will help small businesses upgrade their plants and equipment, and will encourage large corporations to get off the sidelines and start putting their profits to work in places like Cleveland and Toledo and Dayton.”

Mr. Obama also proposed to permanently extend a tax credit for research and development.

And on Monday he offered a plan for “rebuilding and modernizing” America’s roads, rails and runways. He said it would create jobs and improve transportation. The plan would cost fifty billion dollars, but he promised it would not add to the budget deficit over time.

The president spoke in Milwaukee, Wisconsin. Both speeches were in the Midwest, an area hit hard by the recession.

He said almost every Republican in Congress is saying no to his ideas. But retiring Senator George Voinovich of Ohio tells the Washington Post that he plans to help push a bill through the Senate next week. That bill, supported by the president, contains measures to help small businesses.

Still, there is disagreement over the future of the tax cuts approved under President George W. Bush. These are set to end this December. President Obama wants to extend the tax cuts for families that earn less than two hundred fifty thousand dollars a year.

But John Boehner of Ohio, the Republican minority leader in the House of Representatives, told ABC News:

JOHN BOEHNER: “You can’t have a strong economy if you’re raising taxes on the very people you expect to invest in our economy to begin hiring people again.”

Republicans oppose ending the tax cuts for higher earners. They say it would hurt small businesses. Democrats argue that few small businesses earn enough for their taxes to go up.

Congress passed a big stimulus bill shortly after the president took office last year. But there is little that his newest proposals could do to help the economy before November.

And that’s the VOA Special English Economics Report, written by Mario Ritter.  Follow us on Facebook, Twitter, YouTube and iTunes at VOA Learning English. I’m Steve Ember.

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Global Recession Hits the Developing World

October 15th, 2009 at 02:10pm Under Economy Report

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This is the VOA Special English Economics Report.

Both the World Bank and the International Monetary Fund expect the world economy to shrink this year for the first time since World War Two. As recently as January, the I.M.F. had predicted growth of one-half percent. But this week its chief, Dominique Strauss-Kahn, said the world has entered what he called “a great recession.”

A trader reacts last week to a fall in the value of South Korea’s currency, the won

A new World Bank report says the recession may hurt the developing world the most. Those countries depend on trade for economic growth. But world trade is expected to fall at the fastest rate in eighty years.

East Asia has been hardest hit. In February, exports from China fell twenty-six percent from a year ago.

Rich nations are expected to borrow heavily in world credit markets to finance spending at home. But investors are demanding very high returns if they are willing to lend to the developing world at all. Jeff Chelsky, a World Bank senior economist, says investors are avoiding higher risk debt in a flight to quality.

The bank estimates that up to three trillion dollars of public and private loans in developing countries must be repaid this year. Some nations have enough foreign currency reserves, but others will struggle to find new financing to pay their existing debts.

The World Bank estimates that developing nations will need between two hundred seventy and seven hundred billion dollars in financing. The amount depends on the depth of the recession.

The I.M.F. is seeking to expand its lending ability. And World Bank President Robert Zoellick has called on rich nations to put some of their economic recovery spending into a crisis fund to help poor countries.

Bank economist Jeff Chelsky says the poorest countries are in the greatest danger. They cannot borrow in credit markets and they depend on exports of commodities like crops or minerals. But falling commodity prices mean they now depend more than ever on foreign aid.

Finance ministers and central bankers from major industrial and developing countries meet this weekend outside London to discuss the financial crisis. President Obama wants all countries in the Group of Twenty to coordinate their separate efforts to strengthen their economies. But European Union officials have rejected American calls to spend more.

There was some good news this week, including better-than-expected reports on spending by Americans in January and February. And financial stocks rose after Citigroup reported a profit for those two months.

And that’s the VOA Special English Economics Report, written by Mario Ritter. I’m Steve Ember.

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