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March 16th, 2009
04:10 PM ET

Language of the new economy

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The bailouts have brought a new list of terms to the conversation about the economy.

CNNMoney.com staff

The government's economic recovery efforts have brought many new and unfamiliar financial terms into the conversation. Here's a list of some we think are vital to understanding the recession and the government's attempts to fix it:

Alternative Minimum Tax (AMT): The provision was originally intended to prevent high-income taxpayers from using tax breaks to sharply reduce their tax bill. But Congress never adjusted for inflation the amount of income exempt from AMT, putting tens of millions of middle- and upper-middle-income taxpayers at risk of having to pay it. Every year, Congress approves a "patch" that temporarily lifts the income exemption levels.

American Recovery and Reinvestment Act: The $787 billion economic stimulus package contains $212 billion of tax relief, $308 billion of appropriations and $267 billion in direct spending. The Obama administration estimates that the plan will create or save 3.5 million jobs by the end of 2010 and boost consumer spending.

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Filed under: Bailout Turmoil • Economy • Road to Rescue
soundoff (3 Responses)
  1. Michele Gomis

    And I guess, upon reflection, that the "Moguls of Greed" were COUNTING on my ignorance and indifference so that their machinations could work to their complete advantage. Totally excluding any advantage to me, of course.
    (...she said, wizing up slowly....too slowly....)

    March 16, 2009 at 5:26 pm |
  2. Michele Gomis

    Thank you for defining at least some of the terms used by the money world. It is a brutally complicated arena and learning at least some of the language is helpful. Whatever is going on, anywhere, it all runs on words.

    Next step is understanding (at least in a basic way) how the terms connect, both over time (sequence) and direction. Some of that is embedded in the definitions, of course.

    I guess, we're all getting a limited education in the subject of "economics 101" whether we want it or not. With these (and more) definitions maybe we can begin to make better decisions based on improved understanding. I, for one, can at least listen and attend to the news with a clearer idea of why I SHOULD listen and attend!

    March 16, 2009 at 5:14 pm |
  3. Isabel, Brazil

    In my country we usually say that every Brazilian has a little of economist or soccer coach.

    With the economic crisis, we familiarize us with the economic terms and with the sector institutions (IMF, EDF and others).

    I think this is good ... the people understand what is happening, of what you are talking about ... the higher the debate, the better!

    March 16, 2009 at 4:45 pm |