Economy

More than half of the respondents (56 percent) in a new CNN poll say the economy will be an extremely important factor in deciding who they support in the upcoming midterm election. 

A new Rasmussen Reports poll shows 81 percent of surveyed adults know someone who is out of work and looking for a job. 

The finding varied little across demographic, partisan or income groups. 

Economist Jeffrey Sachs, the director of Columbia University’s Earth Institute, on Sunday slammed the Obama administration’s approach to combating the recession.

Sachs took particular issue with the multi-billion dollar stimulus package Obama signed into law shortly after taking office that added to the deficit when the country was already drowning in red ink.

“They added to [the deficit] and thought that that would work both politically and economically,” he told CNN’s "Fareed Zakaria GPS," adding, “What’s happened is the stimulus substituted for thinking; the stimulus substituted for planning.”

Sachs argues the stimulus included tax and spending measures that were aimed at propping up market sectors that had already imploded because of vanishing demand.

“[What] I found surprising about the Obama approach was that it basically was trying to get people to start spending again where they were saying, ‘We’re tired, we’re tired, we need to save a little bit,’” he said. “And once one realizes that consumption is going to be down, we’d need a different approach from simply ‘stimulus,’ from cutting taxes for households to spend more.”

Sen. Bob Corker (R-Tenn.) on Sunday said, "The best thing we can do is calm down."

Republican congressional candidate Ben Quayle (Ariz.) on Friday said he favors increasing the retirement age and shifting Social Security payments into private accounts to keep the fund from bankrupting the government.

“We would protect those who are in or near retirement today, but for people of my generation and younger, we would actually have to reform it which would be to start to gradually increase the retirement age up to 70 and allow a portion of the people to take … their Social Security and actually invest into private accounts,” the 33-year-old told CNN's John King.

Quayle’s take on the entitlement program dovetails with congressional Republican leaders who have recently reiterated calls that hearken back to 2005 to privatize Social Security before it absorbs nearly all of the revenue collected by the government.

Republicans in June of 2005 controlled both chambers of Congress and announced a plan to create individual accounts from the Social Security’s surplus. Privatizing the fund was a campaign pledge of President Bush’s first term that never materialized.

However, shortly after the plan was announced Hurricane Katrina hit and swept privatization off Republicans’ priority list.

If conservative leaders had been successful back in 2005 in privatizing the program it is unclear if retirement accounts would be in better shape today.

The Dow Jones Industrial Average closed at 10,717 on Dec. 30, 2005. The index on Friday closed at 10,303, meaning retirement accounts performing on par with the Dow would have a negative return.

Still, a recent report from the trustee of Social Security states the program will pay full benefits through 2037, at which point recipients will only receive 75 percent of full assistance.

President Obama on Saturday noted the 75th anniversary of Social Security by vowing to protect the program from Republican attempts to privatize it.

“I’ll fight with everything I’ve got to stop those who would gamble your Social Security on Wall Street,” he said. “Because you shouldn’t be worried that a sudden downturn in the stock market will pull all you’ve worked do hard for, all you’ve earned, at risk.”

The nonpartisan Congressional Budget Office, however, said continuing the Bush tax cuts will also help to explode the deficit.

Holding interest rates near zero may inadvertently add uncertainty to the nation's slowing economic recovery instead of providing a boost, Kansas City Federal Reserve Bank President Thomas Hoenig said Friday. 

Hoenig called again today for raising the federal funds rate to 1 percent to allow the economy time to adjust and keep the recovery on track before raising it to 2 percent.

"We need to get off of the emergency rate of zero, move rates up slowly and deliberately," he said during a speech today in Lincoln, Neb. "This will align more closely with the economy’s slow, deliberate recovery so that policy does not lag the recovery."

Earlier this week, the Federal Open Market Committee decided to keep the federal funds rate at zero to 0.25 percent, where it’s been since December 2008, and again said it would keep rates there for an “an extended period.”

Senate Finance Committee ranking member Chuck Grassley (R-Iowa) on Friday wrote Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, asking him to evaluate whether the Treasury Department and General Motors are taking adequate steps to ensure the highest possible return for taxpayers in the upcoming sale of GM stock.

Consumer confidence rose more than expected in August, a possible sign Americans could be ready to start spending again. 

The index climbed to 69.6 in August, up from a 67.8 reading in July, which was the lowest since November, according to the Thomson Reuters/University of Michigan preliminary index of consumer sentiment released Friday.

The index is still well below the average 89 that was consistent in the five years before the recession began in December 2007. 

Consumer spending accounts for about 70 percent of the economy, and the lack of spending has been a drag on the recovery as Americans have opted to save more, with that savings rate hitting its highest level in more than a year. 

Consumer prices rose in July for the first time in several months behind higher energy prices, possibly easing worries that the sputtering economy will slip into a deflationary period.  

The Consumer Price Index, the government's most closely watched inflation measure, rose for the first time in four months by 0.3 percent, the biggest increase since September 2009, the Labor Department reported Friday. 

Analysts had expected a slightly smaller increase. Excluding volatile food and fuel costs, the core inflation rate increased 0.1 percent, as projected, possibly quieting talk about deflation.

Higher energy costs accounted for most of the increase as energy prices were up 2.6 percent last month, the first increase since January. Gas prices rose 4.6 percent and household gas and electricity prices also saw increases in July.