U.S. economy – two frequently asked questions
This post is a guest contribution by Asha Bangalore, vice president and economist at The Northern Trust Company.
Q1. How much of QE2 has been implemented?
Excess reserves of the banking system have also moved up to $1.217 trillion from $969 billion as of November 3, 2010 and reflect the impact of the Fed’s QE2 program (see Chart 2).
Q2. What is the status of the fiscal stimulus package?
Congress enacted the second round of fiscal stimulus under The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, passed on December 6, 2010. The centerpiece of this legislation is the extension of tax cuts enacted under the Economic and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. This legislation extends the tax cuts for another two years and contains other provisions believed to stimulate economic activity. A 2.0% payroll tax cut will be in place during 2011, a 13-month extension of unemployment insurance and allowance for businesses to expense all of their investments in 2011 are the other highlights of this bill.
Source: Asha Bangalore, Northern Trust – Daily Global Commentary, March 7, 2011.
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