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Breaking Down Obama’s Stimulus Package

01.27.09

There has been a lot of discussion between the parties on how the economic stimulus should look.  Apparently things have been more civil in the Senate than in the House.  It actually makes sense if you think about it: senators have six-year terms so they don’t have to worry so much about pleasing their constituents in the short-term like the two-year-term Representatives; senators represent a whole state, not just an arbitrarily drawn district.

That aside, what exactly are they arguing over?  David Goldman at Yahoo! Finance breaks it all down for us.

It seems that it comes down to simple partisan politics.  The GOP wants to avoid too much spending and focus on tax cuts.  The Democrats believe investing in infrastructure to create new jobs will help the economy more than fewer taxes.

According to Goldman, the infrastructure debate looks like this:

The case for: By investing in renewable energy, health care, education and modern construction projects, the Obama administration expects to create between 3 million and 4 million jobs and address key sustainability issues.

The case against: Opponents argue the spending will lead to a rapidly increasing and unsustainable deficit. They also say that a majority of infrastructure projects will take too long to implement.

One could argue that we’re already in a state of a rapidly increasing and unsustainable deficit.  One that sure has its causes directly linked to the almost 6-year-old war in Iraq.  And what are we spending billions on over there (aside from troops and weapons)?  Infrastructure.  I’d much rather see us invest in our own schools, renewable energy sources, and health care system.

Also, the projects will take time.  Years, even.  But the idea of an instant shot of epinephrine to counteract the allergic reaction that is the recession just doesn’t exist.  Bush’s stimulus was supposed to be just that shot and it failed.  All it did was give us a few hundred extra dollars in our pocket.  That was a week’s worth of groceries for a family of five.  It certainly didn’t suddenly give someone the financial ability to buy a new car or new house, or make a business able to hire new employees.

It’s time that we focus on the future and plan ahead instead of the short-sightedness that plagued the Bush Administration.  Just having a well thought out plan in general is quite a change from the past.

What was that old saying?  Give a man a fish, he eats for a day.  Teach him to fish…

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5 comments

  1. o jebus, i have so much to share on this one but it will have to wait. remind me on sunday to respond to this one.


  2. Unfortunately, I do not see the lion’s share of the $825B going to infrastructure. And giving ME a tax cut isn’t going to generate one single job.

    Investment into the country’s infrastructure (and I’m talking roads, bridges, as well as educational and gov’t buildings) will create jobs, in my opinion. And also, when people see things being built, when people see construction happening, it instills confidence. The building industry is a very good indicator of how the economy is doing. If we can get people working, and simultaneously improving failing infrastructural systems, it’s a win-win.

    However, I only wish there were more sustainability incentives enforced in the infrastructure portion of the stimulus plan. 30% of our energy consumption comes from buildings, and there’s a world of opportunity to reduce that in renovations of gov’t buildings and our infrastructure. Why not?

    For the US to really start making an impact on weening ourselves off foreign oil (ANY oil), or saving the planet, it will take a rather sizable push from the gov’t. Just look at how resistant the Big Three are to making “greener” cars!

    Back to the “against” argument Mason posed – yes, infrastructure takes time. Building anything in general DOES compared to the majority of all other industries. It’s the nature of the beast. But this is a long, and drawn out recession, too. The effects of investing in the infrastructure now will have positive, lasting effects for decades to come.


  3. @Amanda:

    You bring up a very important point: seeing things built instills confidence. Just as vacant buildings signals a downturn, watching structures going up gives people reason to be hopeful.

    I think the stimulus package does a pretty good job of accomplishing that, in my opinion. I added up the numbers from that article and $322 Billion has been set aside for infrastructure spending. That’s almost 40% of the plan.

    Also, I’m not sure that the stimulus plan is necessary the best place to really make big pushes toward alternative energy. And $54 Billion in that direction isn’t exactly something to shake your nose at. It’s a huge step forward from the last eight years and one that I think will continue to get attention through legislation and funds for the duration of Obama’s administration.

    As for the tax cuts, I don’t understand them. It’s odd that the GOP keeps pushing for them since they tend to represent the wealthier cross-section of America (minus the religious right) and if $500 extra bucks won’t do much for a lower-middle-class family, then what’s it going to do for an upper-middle-class one?

    And just as a counter to what I just wrote: no, I don’t *like* paying taxes any more than the next citizen. I also know that I do like certain luxuries that the government provides and it costs money, hence taxes. Enough said.


  4. @Mason – Thanks for doing the math… being at work and fitting in a quick response to a political post, I did not take out the calculator! 40% is hefty, I like that percentage. And yes, this is a huge step in the right direction considering the digression we’ve dealt with during the last 8 years. This won’t be an instantaneous fix, and forcing us to switch into alternative energy sources would be too ambitious.

    But what I was talking about in my last comment was not alternative energy, but requiring infrastructure/buildings to be built using *sustainable strategies.* Green building. i.e. Recycled content concrete, asphalt. Reduce light pollution, reduce rainwater run-off, install plumbing fixtures that use less water to operate (these are low-flow fixtures), and install more efficient heating/cooling systems.

    All these strategies are things that are currently being used voluntarily in buildings and infra. projects across the US and World. The products/strategies are already there.

    I would like to start seeing gov’t requirements to make these voluntary choices mandatory in gov’t development. What a way to set an example to private developers and the World that we are actually committed to reduce our consumption of virgin materials, water, and energy. The technology exists, and employing them is proven to reduce building operations costs, and greenhouse gasses, potable water consumption…

    (I should tell you I became a LEED AP in Feb last year. Google the USGBC.) (And we are in total agreement with the uselessness of tax cuts to make jobs.)


  5. @Amanda

    Sorry I read too fast and didn’t realize you were talking about sustainable strategies! I agree with you. I can see the GOP being against any regulations that require a business to something that might not be in their best financial interest (read: costs them money up front) – hence their stance on global warming. It’s not about the climate. It’s about the pocketbook.

    So that’s what your LEED accreditation means! Very, very cool. It always amazes me at how we have the technology and means in places, yet still doesn’t happen. I’m hopeful for this administration to change that.



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