Friday, February 06, 2009

The Pros and Cons of President Obama’s New Stimulus Proposal

Although President Obama’s new stimulus bill has been on the table for a while now, it “new” bill nonetheless. Constant revisions and bi-partisan oppositions are making the bill an ever-changing and ever-controversial subject on Capitol Hill. Even politicians are having trouble keeping up on the status of the bill, and we as busy Americans have to rely on the media to provide information on the bill. To help some of my readers who are having trouble making a choice on how they feel about the bill, I have put together the following list of pros and cons.

Pro: Job Creation

The main goal of Obama’s stimulus proposal is to create jobs, however not everyone aggress that the package will do so. The Obama team compares the plan to Franklin D. Roosevelt’s “New Deal,” in that it will directly create millions of jobs by funding constructions projects such as repairing bridges, roads, water systems, levees, schools, and electric grids, etc. The idea is that by giving construction workers back the jobs they had lost due to canceled projects and stringent state budgets that they will leave their current positions creating other job openings for Americans to fill. However, decades later people are still debating whether FDR’s new deal was effective or not.

Con: Use of Scare Tactics

Unfortunately, in order to get the legislation passed as quickly as possible the Democratic leadership has resorted to using a wide variety of scare tactics. I’m sure everyone has heard about Nancy Pelosi’s gaffe the other day where she said that 500 million Americans lose their jobs every month and that this legislation needed to be passed as soon as possible. Keep in mind that there are only 300 million Americans currently living in the country.

The point is that with the amount of money being put into the stimulus proposal it should not be rushed using scare tactics. Look what happened with the federal bailout of the banking industries. Congress rushed legislation and to this day there are still billions of dollars in funds that are unaccounted for. Additionally, news just came out the other day showing that the federal government wasted billions of dollars by purchasing the assets at highly inflated prices.

Pro: Obama Open to Compromise

While there are plenty of disagreements on certain aspects of the proposal, on January 27th, Obama stated that he was "open to compromise". While this may not seem like a pro to some, it is definitely a good thing that the President publicly announced that he was open to compromise. Unfortunately, he was quite hesitant to actually make changes to the legislation.

Con: Lack of Support

Although Obama was able to get his proposal to pass the House of Representatives, without a single Republican vote, many are worried about the fate of the bill in the Senate, where the Democrats do not have a filibuster proof majority. Additionally, according to a recent Rasmussen Reports survey, about half of Americans think that the package will make the economy worse instead of better.

Pro: Mortgage Relief

One of the largest problems Republican leaders had with Obama’s original stimulus package was that it did not do enough to provide relief to the house and mortgage industry, which was a leading cause of the recession. Fortunately, Obama’s team listened to the suggestions, and have added multiple different measures to help struggling homeowners including a $15,000 credit for anyone who purchases a house in 2009.

Con: Strong Conservative Opposition

The Republican leadership has been fighting hard against the bill since before it was officially drafted. They argue that spending upwards of a trillion dollars is a dangerous move in our country’s current economic state, and have been working to reduce the total cost of the legislation.

Pro: Energy Efficiency

As part of Obama’s proposal, $54 billion is being dedicated to clean power and energy efficiency. Although it may seem like wasteful spending to some, this is the first step in many steps Obama promised during his campaign to reduce our reliance on oil. The plan will include $32 billion for renewable energy, smart grid technology, and transmission lines, $16 billion to make essential eco-friendly retrofits and repair public housing, and $6 billion to efficiently weatherize modest-income homes. Weather or not you agree with Obama’s plan to reduce our dependence on oil, it is definitely good that he is following up on a campaign promise.

Con: The Looming Trillion

The goal for the stimulus package is to stay "under the trillion dollar mark". However, as the package price tag creeps up in to the $900 billion area, financial experts are beginning to worry. New changes and discrepancies arise every day, as new sections are being reviewed every hour. However, it seems like although changes are being made, the total cost is increasing, not decreasing.

Pro: Computer Centers at Community Colleges

Although there has been some controversy about the $200 million for public computer centers at community colleges in the bill, there is good reason to support it. Providing more computer access to community colleges will provide students with the unlimited resources that the Internet has to offer. Obama has said that we need create more scholars and promote growing minds if we want to get this country back on track.

Con: Buy America

Unfortunately, when Obama launched his campaign to get the legislation passed, he angered international groups including the European Union with his “Buy America” package. The idea behind it would be to encourage people to purchase and use American made products, however this is bad news for international trade and intensified international fears of a trade war. Fortunately, Obama was quick to remove this section from the legislation once it garnered international criticism.

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