OSSINING, N.Y. Village mayor William Hanauer said Thursday's stock market crash reflected poorly on our federal government, which "has gone completely off the rails," but the crash would not affect village funds, which are required to be invested very conservatively.
"This deficit reduction package is about the worst thing they could have done, to allow a bunch of ignorant extremists to set the agenda and to hold hostage the fate of the nation," Hanauer said, referring to the debate over a law aimed at cutting federal spending and increasing the debt limit. The law was signed into effect Tuesday by President Barack Obama.
Economic analysts said the Dow Jones' more than 500 point drop on Thursday, the worst drop since October 2008, was a reflection of worries about the state of the economy in the U.S. around the world, combined with debt troubles in Europe.
The Village of Ossining's investments don't pay back a lot of money, but they are relatively safe from sudden stock market crashes, Hanauer said.
"Thank God we don't have that sort of investment. We are required to have extremely conservative investments that don't pay off as high," he said.
Donald Borho, the owner of Wondrous Things lifestyle gift store on Pleasantville Road in Briarcliff, said he was surprised by Thursday's market crash given that a deficit reduction package was signed into effect just two days earlier.
"When the president ended up signing the bill, I thought the markets were going to calm down, and on Wednesday they were also talking about reports of some job growths in July," he said. "Now it's Thursday and the markets go crazy. It makes no sense."
Hanauer believes that in times of financial troubles, the federal government should create a large infrastructure project, rather than instilling cutbacks.
"We need to put people to work earning real wages, not service industry wages, so they can go out and buy things and spend money," he said. "Unless the government does it, no one's going to do it."
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