President elect Obama recently announced his economic recovery plan, the American Recovery and Reinvestment Plan. It doesn’t appear that his plan includes a second economic stimulus check, at least not like the last stimulus check. But Obama’s plan just may put more money in your pocket anyway. Obama’s plan calls for several major projects that he hopes will create upward of 3 million jobs, improve our nation’s schools and infrastructure, computerize the health care system, decrease our dependency on foreign energy and lower taxes for American workers. This is a series of lofty goals, but our economy is in a recession, and it will take bold moves to set us on the path toward recovery.
Here is what Obama’s new economic stimulus plan calls for:
Double renewable energy
I’m a big fan of renewable energy, as well as increasing reliance on more energy efficient items such as CFLs and more energy efficient vehicles. Obama’s plan calls for doubling renewable energy sources in the US, and increasing the energy efficiency of government buildings. I support this 100% and think we should have started it years ago. The more we use our free resources such as wind, sun, and hydroelectric power to provide power our homes, the less we need to rely on digging coal and importing foreign fossil fuels. I haven’t heard any mention of it, but I also support the building of nuclear power plants, which provide a cleaner, safer, cheaper, and more efficient means of producing electricity. France has been a world leader in nuclear power for years, and now supplies much of Europe with their excess electricity.
Rebuild roads and schools and modernize classrooms
There are many highway systems and bridges across the US that are becoming dangerous.Creating jobs to repair our infrastructure will increase safety and provide hundreds of thousands of jobs. And those workers will spend the money they earn, which should work well for our economy.
Modernize classrooms, labs, and libraries. Many schools are funded at a state or local level, and many states and cities are currently running on a deficit, as their funds are running low due to decreased tax income, job losses, and an overall bad economy. Government funding will help make up that shortfall and make it easier to improve our schools.
Computerize the health care system
The US health care system has a lot of room for improvement. One of the biggest areas for improvement is cost and availability. But another major area of concern is our health care system’s complexity. There are literally thousands of different computer systems to track the same information and the problem is that many of these systems do not communicate well with each other. This means there either needs to be an intermediate system used to translate raw data into a form that can be used by another system, or the data needs to be manually input into the other system. This causes a lot of costly and sometimes dangerous errors to be made and creates delays to filing claims for health care. The government would be well served to create and Enterprise Resource Planning System to integrate health care information and claims systems to reduce errors and other complications that arise from incomplete or incorrect data.
While he was campaigning for President, Barack Obama proposed several tax cuts aimed toward reducing the taxes that people in the middle and lower income tax brackets pay. While it doesn’t appear as though Obama is prepared to send tax payers a check like the first economic stimulus check, it does appear as though he favors creating a new tax credit that would be advanced to tax payers, meaning workers would see the money in their checks now instead of as a credit at the end of the year. The proposed plan calls for up to $500 for single people and up to $1000 per married couple.
Will Obama’s American Recovery and Reinvestment Plan work?
First off, this is only a plan; Obama has not yet been sworn into office, and this has not yet been approved by Congress. But I think he wants to get things started quickly, and I commend him for stepping up and taking charge. I think his plan is a step in the right direction, but even if it is approved and implemented, our economy faces an uphill battle, and it will likely take a few years before we see major improvements.
The other consideration is the cost of the plan. Initial estimates put the plan cost at $650 billion – $750 billion, but some economists estimate that it could reach as high as $1 trillion. Obama’s recovery plan calls for increased spending, and the only way to pay for increased spending is to decrease spending elsewhere, or increase income (usually in the form of taxes). Obama has not proposed any major program cuts, and has not yet mentioned how he will pay for his recovery plan.
There are obviously many details that need to be worked out, and I think this will be an interesting topic over the next few months.
More information about Obama’s recovery plan can be found here:
- Obama’s American Recovery and Reinvestment Plan: Economic Recovery Plan Details.
- Obama’s paycheck bonus.
- Obama sketches out recovery plan.
Photo credit: jurvetson