Metro's mortgage woes 'will get worse'

The Group of Seven industrialized countries warned of risks in the troubled American economy and housing sector, but leavened that with assurances that the world's biggest economy would grow this year, albeit at a slower pace.

World financial markets have been battered amid worries about a possible U.S. recession and uncertainty about the subprime mortgage crisis that has led to billions in losses at major banks. A main thrust of Saturday's meeting was to reassure the world that the U.S. wasn't in recession.

I believe that we're going to keep growing, said U.S. Treasury Secretary Henry Paulson. If you're growing, you're not in recession.

The officials - from the United States, Japan, Germany, France, Britain, Italy and Canada - pledged to take actions on their own and together to secure stability and growth in our economies, without outlining specifics. read more

Small mercies and the Rock

Press secretary Dana Perino said Bush would demand that any package be effective, simple and temporary; mirroring calls by Democratic lawmakers for a timely, targeted and temporary stimulus measure.

Taxpayers could receive rebates of up to $800 for individuals and $1,600 for married couples under a White House plan. Although lawmakers were considering smaller rebate checks and more money for food stamp recipients and the unemployed, Bush told congressional leaders that he favors income tax rebates for people and tax breaks for business investment.

Federal Reserve Chairman Ben Bernanke entered the stimulus debate Thursday, endorsing the idea of putting money into the hands of those who would spend it quickly and boost the flagging economy.

The scramble to take action came as fears mounted that a severe housing slump and a painful credit crisis could cause people to clamp down on their spending and businesses to put a lid on hiring, throwing the country into its first recession since 2001. read more