Financial institutions and states are watching events in DC. A community bank outside of Boston says it will waive overdraft fees for customers if they don’t receive Social Security and other checks from the government. Some investment firms are conducting stress tests and California may seek a bridge loan if Congress and President Obama fail to reach agreement on raising the debt ceiling. The loan would help pay California’s bills if the federal government stops paying for things like Medicaid. We’ll talk about worst-case scenarios and what’s being done to prepare for them.
Former labor secretary Robert Reich has been critical of President Obama’s emphasis on budget cuts to reach a debt deal. He is asking why spending, in the form of a new stimulus package to revive the economy and put more people to work, is not even on the agenda. Reich writes in his blog that Americans are now living in parallel universes. The first, he writes, is “the one in which most Americans live, where almost 15 million are unemployed, wages are declining, and we’re locked in a vicious economic cycle.” Reich argues that more government spending is “the only way out of the vicious economic cycle,” something that America has understood in every economic downturn since the World War II. The problem, says Reich, is that the other parallel universe, Washington DC, is moving in exactly the opposite direction, cutting spending, with Republicans proposing cuts and Democrats, including the President, playing, “I can cut the deficit more than you.” Reich joins us this hour.
You funded Erica Peterson’s recent series on coal ash though a program called Story Exchange – a model that answers the question, “What if local public radio stations with loyal news audiences were able to pitch ambitious story and project ideas directly to listeners?” John Barth, managing director of Public Radio Exchange, is in our studio this hour to explain how it works.