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Economic Update: $1 Trillion for Global Crisis, Rising Unemployment, U.S. Budget

The leaders of the world's largest economies pledged $1 trillion to fight the global economic downturn at the Group of 20 (G20) meeting in London this week. President Obama committed $100 billion from the United States, but the investment must still be approved by Congress.
Britain's Prime Minister Gordon Brown, who organized the assembly, said, ""This is the day the world came together to fight against the global recession. Our message today is clear and certain: we believe that global problems require global solutions.""
The heads of countries agreed to commit $750 billion to the International Monetary Fund, which has already lent billions in emergency loans to underdeveloped countries as the financial crisis has spread to their already strapped economies. The leaders also agreed to institute $250 billion in trade credits, in hopes of reviving cross-border trade which has declined roughly 10 percent as a result of the credit crisis and is experiencing its first contraction in 30 years.
In addition, the international consortium called for reform of the international banking system and agreed to new, more stringent regulations on hedge funds and rating agencies. The leaders are also planning to crack down on tax haven nations, which will be subject to sanctions if they refuse to share tax information with authorities in other countries. According to _""The New York Times"":http://www.nytimes.com/2009/04/03/world/europe/03summit.htmlxth&emc=th_, a senior Obama administration official cautioned that the sanctions were ""future oriented.""
But, on the critical issue of how to tackle trillions of dollars in toxic assets clogging financial systems in Europe and the United States, the _Times _said, there was a declaration of goals by the G20 participants but few specific actions were given.
President Obama and the U.S. Treasury Department, however, have already set into motion a domestic program for relieving banks' here of distressed mortgage assets, embodied in the government's new Public-Private Investment Program (PPIP).
_(_DS News_ shares the administration's position that this important step toward a housing and economic recovery must involve the private sector. To that end, we are hosting the ""Distressed Asset Roundtable & Exchange"":http://www.dsnewsdare.com - DARE - in New York next month, to bring private equity and institutional investors together with lenders and mortgage servicers, in a collaborative environment to deliberate and address the issues surrounding investment in distressed residential assets.)_
Back in the States, the Bureau of Labor Statistics released its ""March unemployment figures"":http://www.bls.gov/news.release/empsit.nr0.htm on Friday. Last month, the number of jobless Americans increased by 694,000 to 13.2 million, and the unemployment rate rose to 8.5 percent - its highest level since 1983.
Employment in financial activities took a heavy hit in March, dropping by 43,000. According to the Labor Department, the number of jobs in the finance industry has declined by 495,000 since its employment peak in December 2006, and more than half of this loss occurred in the past seven months. In March, financial job losses occurred in credit intermediation (-15,000); real estate (-12,000); and securities, commodity contracts, and investments (-7,000), the government agency reported.
On Thursday, the House and Senate approved their versions of President Obama's $3.6 trillion 2010 budget. According to a _""Wall Street Journal"":http://online.wsj.com/article/SB123870974208284245.html_ report, democrats made some changes and trimmings to the president's original fiscal plan, but kept intact the core of his priorities for increased spending on health care, energy, and education. Revisions made by both congressional chambers eliminate Obama's request for an additional $250 billion in bank bailouts. The House and Senate now must settle on a compromised version of the national budget.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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