The government today announced preliminary plans to help try and stimulate the U.S.economy to help pull the economy out of a recession, will this plan be enough?

The economic stimulus plan announced by President Bush is only one part of what will need to happen for the country to avoid a pro longed recession. You can expect that the Federal Reserve will act aggressively in cutting the fed funds rate by at least .5% later in January down to 3.75%. These two moves will help the economy but the larger areas of concern are the housing market, credit markets and employment. In theory if consumers have more capital to spend, this will help businesses and hopefully lead towards more hiring. The credit markets should begin to relax as the fed funds rate is lowered, but the housing market is a minimum of 12-18 months from beginning its recovery. Its obvious that the 2008 recession will probably last a minimum of 6-9 months and potentially into 2009.

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