San Diegans Put Hopes in Economic Stimulus

Federal Reserve Chair believes second economic stimulus package may be a good idea

By Christopher Chan
|  Tuesday, Oct 21, 2008  |  Updated 11:30 AM PDT
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San Diegans Put Hopes in Economic Stimulus

Getty Images/Tim Boyle

Federal Reserve Chairman Ben Bernanke told Congress Monday that a second economic stimulus package may be a good idea.

Federal Reserve Chairman Ben Bernanke told Congress Monday that a second economic stimulus package may be a good idea.

"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.

Professor James Hamilton of the UCSD School of Economics said the stimulus would be positive for the country.  "Recessions are painful things, and in any recession there are innocent bystanders. Anything you could do to ease the pain would be good."

Hamilton said the danger of more stimulus and bailouts would be a loss of confidence from foreign investors who may think the government is unable to manage its fiscal policy.

"It's a fine line we have to walk" Hamilton said. 

Hamilton stressed it was a short-term measure and would likely not help people out of their debt and mortgage problems.

Two weeks ago, Christina and Rubin Reyes found out they wouldn't have to lose their home.  Unable to make their mortgage payment after the interest rate floated, their mortgage company reduced their interest rate and their loan amount.  It made their monthly payment affordable.

But last Friday, Christina found out her employer, Mervyn's, was going out of business for good.

"I thought it was going to go out of business, but I didn't expect it to be so soon" Christina said. 

Christina has some time though.  She said the company will employ her until the end of December, and then she will be eligible for unemployment benefits. She said that she remains hopeful. 

"I'm still going to keep my head up," Christina said. "I'm going to go on and look for another job, keep my home.  I want to stay in my home as long as I can."

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