Obama seeks $310 billion in tax cuts

SINGAPORE (Reuters) - President-elect Barack Obama is seeking as much as $310 billion in tax cuts as part of a massive stimulus plan to counter what senior policymakers warned could be a prolonged period of economic stagnation and deflation.

Obama's plan is the latest in a series of measures aimed at tackling a financial crisis that began with U.S. mortgage defaults in 2007 and has now plunged major economies into recession, reshaped the banking landscape and taken entire countries to the brink of bankruptcy.

Over the weekend, both Janet Yellen, president of the San Francisco Federal Reserve Bank, and Lucas Papademos, vice president of the European Central Bank, highlighted the risks of deflation -- an economically damaging spiral of falling prices and demand.

Investors have, however, begun to make tentative bets that the worst of the turmoil triggered in September by the collapse of investment bank Lehman Brothers is over.

Kicking off the first full week of 2009, they pushed up stocks, the dollar and commodities while selling safe-haven plays such as government bonds and the Japanese yen.

Elsewhere there were signs of greater stability. South Korea, one of those countries that appeared to be on the brink of financial collapse, said its foreign exchange reserves rose in December for the first time in nine months.

Helping increase the appetite for riskier assets, senior Democratic aides said Obama planned to discuss his tax cut and stimulus package plans with Democratic and Republican leaders of the Senate and House of Representatives on Monday.

The tax relief proposals are designed to attract support from fiscal conservatives in Congress, who prefer cutting taxes to increasing federal spending.

Under Obama's proposal, about 40 percent of an economic package worth as much as $775 billion would be in the form of tax breaks for businesses and the middle class, one aide said.

FINANCIAL AND ECONOMIC FIRESTORM

The U.S. economy is in need of drastic measures. U.S. jobs data at the end of the week are expected to show half a million jobs were lost in December alone, pushing the unemployment rate to 7 percent.

"The financial and economic firestorm we face today poses a serious risk of an extended period of stagnation -- a very grim outcome," Yellen, a voting member of the Federal Open Market Committee in 2009, said.

"I'm strongly supportive of a substantial fiscal stimulus package," she said at the annual meeting of the American Economics Association on Sunday.

"If ever, in my professional career, there was a time for active, discretionary fiscal stimulus, it is now."

Even with the Fed's efforts to restore credit flows, an extended period of economic weakness was likely, she added.

Yellen also said the Fed would likely expand its raft of unconventional monetary policy measures now that its benchmark rate has hit rock-bottom. The Fed's target rate is between 0.25 percent and zero.

The ECB's Papademos, meanwhile, said that more interest rate cuts may be needed to support the euro zone economy and keep deflation at bay.

"We will do what is necessary, in terms of the timing and in terms of the size (of interest rate policy action) to ensure that price stability is preserved," he said.

Central banks elsewhere are rushing to reduce interest rates to historically low levels.

The Bank of England is expected to cut interest rates to 1.25 percent this week, taking its base rate to the lowest since the BoE was founded in 1694.

Central banks in South Korea and Indonesia are also expected to lower borrowing costs again this week.

STOCK RALLY CONTINUES

Since hitting multi-year lows in November, stock markets have responded positively to the flood of money pouring into the system from central banks and governments.

Tokyo's Nikkei average ended a shortened session up 2.1 percent, while stocks elsewhere in the Asia-Pacific region gained 1.4 percent by 0337 GMT, hitting a two-month high.

Oil prices gained 1.8 percent, while base metals such as copper and zinc also rose on expectations of a recovery in industrial demand.

Still, some analysts cautioned against expecting a rapid rebound in economic growth.

"It took more than three years for the economy to recover from both the dot.com bust of 2000 and the stock market crash of 1929," Merrill Lynch's U.S. economist David Rosenberg said in a note.

"So, in our view, hopes that the economy is going to recover as soon as mid-year are likely to be dashed in coming months."

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An Afghan interpreter who helped save then-Sen. Joe Biden's life in 2008 was among those stranded in Afghanistan after Biden's troop withdrawal. He has now escaped the country with his family, but not with President Biden's help.

Thanks to private organizations, including The Nazarene Fund, the interpreter and his family have now been rescued.

Watch the video clip below to hear Glenn Beck share the details:

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A shocking new report by The Daily Wire reveals that the furious father whose arrest at a school board meeting likely sparked the call for the FBI to investigate anti-CRT parents like domestic terrorists was furious for good reasons: The Loudoun County School Board allegedly tried to cover up his daughter's rape.

Rep. Chris Stewart (R-Utah) joined Glenn Beck on the radio program Tuesday to discuss the incident and explain why he joined 60 lawmakers in a letter to Attorney General Merrick Garland demanding answers for why the FBI is targeting parents.

"We want to know ... what kind of coordination took place between the White House, activist groups and teachers unions, and the Department of Justice," Stewart told Glenn. "Because we have evidence that there was [coordination] and, in fact, that the White House are the ones who initiated this. They asked for these activist groups to write this inflammatory letter to the Department of Justice saying they were 'intimidated' and that they 'felt threatened', giving the Department of Justice Attorney General Garland, the excuse to say, 'Okay, well, we have to respond'."

Stewart went on to say he believes the federal government would only involve the FBI in such an issue if its purpose is to silence and intimidate parents concerned about the "poison" being taught to their kids in school. So, what can he and the other representatives who disagree with the Biden administration's overreach of power do to stop it?

Watch the video clip below to hear Stewart explain:

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Taiwan's Foreign Minister Joseph Wu is now warning that his nation is preparing for war with China after Beijing flew a record number of warplanes over Taiwanese territory. Wu reached out to another country for help, but it wasn't the United States.

In a video, Wu urged Australia to help prepare for a possible invasion, but gave the U.S. no mention.

"The defense of Taiwan is in our own hands, and we are absolutely committed to that. And if China is going to launch a war against Taiwan, we will fight until the end. And that is our commitment. And, of course, during this period of time, we would like to exchange with other countries for security cooperation," Wu said on ABC News In-depth's China Tonight program. "We would like to engage in security or intelligence exchanges with other like-minded partners, Australia included, so that Taiwan is better prepared to deal with the war situation. And so far, our relations with Australia is very good. And that is what we appreciate it for."

On "The Glenn Beck Program," Glenn, Pat Gray, and Stu Burguiere discussed whether or not America would do anything during such a conflict — because it sure seems like President Joe Biden is more focused on working with China to fight climate change. Plus, why did China just cut off all cryptocurrency?

Watch the video clip below to catch the conversation:

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On "Glenn TV" tonight, Glenn Beck heads to the chalkboard to reveal how the fundamental transformation of America has already begun by turning the Declaration of Independence upside down.

If Donald Trump was a dictator, then what do we call President Biden? In Biden's first nine months in office, he has already issued 64 executive orders – that's more than Trump, Obama, W. Bush, Clinton, Bush, and Reagan each issued in their entire first years in office.

You never hear the Left talk about the Declaration of Independence, the Constitution, or the Bill of Rights any more, unless it's to "reimagine" the Constitution or slap a "harmful content" warning on our founding documents. Seriously. The National Archives said while its website label wasn't targeting the Constitution specifically, "some of the materials presented here may reflect outdated, biased, offensive, and possibly violent views and opinions." The Left finds basic, guaranteed rights so offensive they now spend all of their time on workarounds to deal with America's annoying founding documents.

Watch the full episode of "Glenn TV" below to see Glenn outline the aggressive unconstitutional abuses "King Biden" is jamming down our throats and teaches Americans how we can defend against presidential tyranny.

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To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.