President Obama discussed some of the details of his proposed $825 billion stimulus plan on Saturday, promising efforts that would include 3000 miles of new electrical lines, increased security at 90 U.S. ports, and doubling the U.S.’s renewable energy capacity over the next 3 years. Some additional highlights include:
- Upgrade 10,000 schools and improve learning for about 5 million students.
- Save $2 billion a year by making federal buildings energy efficient.
- Triple the number of undergraduate and graduate fellowships in science.
According to the Obama team, it will save or create 3 to 4 million jobs over the next few years.
The proposed spending, as far as I can tell, is in addition to the appx. $300 billion in tax cuts (together they total the $825 billion), the last I heard would be $500 for individuals and $1000 for couples, reduced in paycheck withholdings (doesn’t look like there will be a second stimulus check at this time.)
Will it Work?
It is obviously too early to tell, but while creation of jobs is a good thing, as is saving energy, what happens to those hired to make houses and government offices more energy efficient when the government money is spent? I am not sure it is wise to assume in a case like this that the demand would still be there if the government wasn’t paying for it.
What do you think? Can we spend our way out of a recession? Will borrowing to invest in our future pay off?
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{ 4 comments… read them below or add one }
Spending money we don’t have is what got us INTO the recession, it seems unlikely to fix it as well.
@Slinky- It seems like it’s common sense that more borrowing and spending may not solve the problem, but I an no economist! I guess time will tell, but I am not overly optimistic.
Yeah, I’m obviously not optimistic either. For me it all comes down to the whole “Too big to fail” thing. I don’t care how big a company is, if they make stupid business decisions, they should suffer the consequences. Let another business with a better business model take over their market share. That seems like a smarter solution than propping up poorly managed companies. But what do I know? I’m not an economist either.
@Slinky- I agree, although I do see the scare with the banks and not wanting too many of them to fail-but a lot of other companies (not just the auto manufacturer’s) seem to be waiting in line for a piece of the stimulus. Hopefully, they will dish it out wisely.