President Obama And The Stimulus

Photo Source: Clipart.com

As I write this article, President Obama has been in office for a little over one month. He has certainly stirred up a hornet's nest with the Republican party. I just wish that for once we could have unity, but its politics as usual in Washington with the Republicans trying to either block everything or stab him in the back at every turn. One has to admit that he is going full speed ahead with the policies that he promised, even if some were cut back by Congress. The little guy is just not important to some people and if there isn't much in a package for the BIG guy, they will not vote for it. This is supposed to be America where our representatives in government are elected to back us, not just the rich and powerful. I see now where some Republican governors are talking about refusing money from Washington. I would hate to see our government become a one party government, but if President Obama is successful, those governors and even those senators and representatives they have fought the economic stimulus may themselves lose their positions in government, come the next election.

Can you imagine if the stimulus package works and some states refuse the money? Do any of us think that the people who were in charge who refused this money will be voted back in? It is no good for a government to be mostly made up of one party. I am not talking about a simple majority here, but an overwhelming membership by one party or the other. I just don't understand why, after wasting and even losing trillions of dollars under the Bush administration, most Republicans would say that we are spending too much money to try and get the country back on its feet and bail out those in need? I know the proposed bailout is far from perfect, but it has been made even more that way to please some Republicans who then voted against it anyway. The amount of money that was to be given to the public was cut back, along with other concessions. With statements like those made by Paul Volcker, the former Federal Reserve Chairman, that the economy is deteriorating even faster than it did during the Great Depression, cooperation is sorely needed.

I have to say, no more concessions. They don't do any good and are not even appreciated. Go ahead with the plans. The country is in a terrible economic mess thanks to the last administration and those that supported, the biggest spending administration in history, have some gall talking about this administration spending too much money when we know where this money is going. So far we have gotten a slightly watered down stimulus package and the rest of what was left from the first bank bailout. Tax cuts have been ordered for 95 percent of the citizens. Rebates will be forthcoming and hospitalization is about to be worked on. Not bad for just over a month, not bad at all.

What were some of the items in the stimulus package anyway? Well there is a system that not many ordinary people know about or would normally even care about. It is the system that provides money to the banks. The way it works is that banks no longer hold mortgages, they are sold to investors and the banks collect the interest. It is called securitization and is complicated. Because of this the banks can not take the loans off their books easily. This has tightened credit to the point that it has become mostly unavailable. So much money has been lost from this system that it equals all the money borrowed by business for the entire year of 2007. This is one area where the stimulus package attacks with money. It is hoped by doing this that credit will loosen up.

Another item in the stimulus package is money for high speed railroads. This country has fallen far behind countries like Japan and those in Europe in high speed rail transportation. This is expected to provide jobs for rail repair and development and may draw more money by investors for new trains in the future. High speed rail service could make it easier for people to commute further to get better jobs and still do it in a reasonable amount of time.

Workers who become unemployed would have received a temporary entitlement to receive Medicaid. It was not contingent on savings and such, just the fact that a person was unemployed and this would have also applied to a person's spouse and children. Help would have also been available to assist a former worker retain the medical plan they had when he or she did work. This was severely reduced by the House and Senate.

Because of concessions in the stimulus bill, many economists believe that it may be too lean to jolt the economy enough. The final bill includes 507 billion in spending and 282 billion in tax cuts. The stimulus bill pales though when compared to the new bank rescue plan proposed by new Treasury Secretary Geithner. His plan would cost 2.5 trillion dollars and this offends many people who believe that banks and financial institutions that played foot loose and fancy free with their funds and paid huge amounts to their CEOs should be allowed to fail. I have to say that this thought is compelling, but realistically this would put millions more out of work. The president has proposed very tight controlls on how this money is to be spent and oversight will be key.

Public works projects will be funded with 150 billion dollars and states that don't turn it down will be given money to help fund Medicaid costs. Middle class tax payers were spared from paying the alternative minimum tax in 2009, a measure that was enacted to force the rich to pay taxes, but which retained the same limits over the years as incomes rose, putting many middle income tax payers in the higher bracket.

Will things work out for us, will the president be able to bail out the economy, or will we drown under a sea of debt? Stay tuned for the rest of the story which should appear in a couple of years.