Obama: Country Needs Economic Stimulus Plan

CHICAGO — President-elect Barack Obama urged congressional leaders Saturday to move quickly on an economic recovery plan, even as some Republicans are saying they want more time to review the details.

Obama said Congress should pass an American Recovery and Reinvestment Plan designed to create 3 million jobs. The Democratic president-elect hasn't announced a final price tag on it, but aides said the cost could be as high as $775 billion.

"For too many families, this new year brings new unease and uncertainty as bills pile up, debts continue to mount and parents worry that their children won't have the same opportunities they had," Obama said in an address taped Friday and distributed on radio and posted on YouTube Saturday morning.

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The nation's economy remains the top challenge facing Obama when he takes office on Jan. 20. The Federal Reserve estimated that lenders were on track to initiate 2.25 million foreclosures this year, more than doubling the annual pace before the crisis set in. One in 10 U.S. homeowners is delinquent on mortgage payments or in foreclosure.

House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., are to receive details on Monday. Obama plans meetings next week with other congressional leaders _ including Republican members whose support he will need _ and made an effort not to blame his predecessor, the unpopular President George W. Bush.

"However we got here, the problems we face today are not Democratic problems or Republican problems," Obama said. "The dreams of putting a child through college, or staying in your home, or retiring with dignity and security know no boundaries of party or ideology. ... I am optimistic that if we come together to seek solutions that advance not the interests of any party, or the agenda of any one group, but the aspirations of all Americans, then we will meet the challenges of our time just as previous generations have met the challenges of theirs."

Obama aides had hoped to have an economic plan approved by the House and Senate before Obama takes office. That timeline, though, appears unlikely as time is running out and Republicans have urged a delay to review the plans. Sen. Mitch McConnell, the Republicans' top official, said the plan needs time so that "every dollar needs to be spent wisely and not wasted in the rush to get it spent."

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Congressional aides briefed on the measure say it's likely to blend tax cuts of $500 to $1,000 for middle-class individuals and couples with about $200 billion to help revenue-starved states with their Medicaid programs and other operating costs.

A large portion of the measure will go toward infrastructure projects, blending old-fashioned brick and mortar programs such as road and bridge repairs and water projects with new programs such as research and development on energy efficiency and an expensive rebuilding of the information technology system for health care.

"Economists from across the political spectrum agree that if we don't act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment and the American dream slipping further and further out of reach," Obama said.

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Andrew Taylor reported from Washington.

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On the Net:

Obama Address: http://change.gov/newsroom/entry/american_recovery_and_reinvestment/

Comments

[msjimmied]

Let's think outside the box for a bit and mull over the wisdom in legalizing marijuana for instance...Hmmm, I wonder how much that can add to the coffers. Lord! we could empty 60% of the jails and eliminate the associated costs if we release non violent offenders.

I am thinking of more...you don't have to agree, just think.

[Shieldmaiden]

The problem with the economy is that there are no clear answers. No right and wrong so to speak. Some solutions worked historically. Other things are trial and error.

[paixa3]

Sheildmaiden: I am sorry to write that you are absolutely WRONG. Based upon good financial managfement principles and the so called economic theory of, there were specific actions that could have been taken and they were NOT considered at all.

Specifically:
Reversal of rich tax exclusions IMMEDIATELY
Cut Military industrial speding by 25% IMMEDIATELY
End all mercenary servcices IMMEDIATELY
Re wrtie all mortages to be fixed lengths and rates, 2% abvoe prime immediately.

Your congress seem to be rather daft and totally corrupt. They have betrayed YOU.

[HappyIdiot2008]

Capitalism = greed. It's okay to make money. It's not okay to love it. Money has its place. To create the better good of all. Not just you.

[Amennyc]

Wasn't the 700 Billion+ supposed to do the trick? Or do we need another no strings attached infusion of executive bonuses?

[tallcoolone47]

We need to fix the problem not throw money at it, the Federal Government is designed to keep us safe not employed. I cannot recall a single instance where Goverment involvement in private enterprise produced any positive results.

Fire the corrupt Politicians from both parties that caused this, Name them and fire them there is a historic opportunity here I hope O siezes it.

[Sabreen60]

Ever heard of FDR and the New Deal???

[hotwire]

Yeah, but it's a good thing for old Frank that WW2 came along and bailed his butt out or we might still be trying to get out of the mess he created. Boy, I'll bet this will get you guys fired up, huh?

[AMERIKA]

My question is this: What will the republicans in the Senate do? If they work to hold up the plan, that will show their true colors, but if they cross party lines and work with Obama I will be thankful and very very surprised.

We need to put pressure on them to act quickly and decisively. If Obama is the leader he appears to be, then he will have no trouble using the bully pulpit to his advantage.

[jinxed]

All he has to do s name names and tell what they are doing to harm America.

[iblog]

exactly!

Especially with his plan for a real time viewing by the public of the open government processes.

[jeff-m]

it is an american problem but he s suggesting we look the other way, and not peel the onion to find out how we got here. we're supposed to just fall in line again and let the politicians "save" us. History shows that this is how tyrranical governments rob citizens of freedom and liberty, when citizens ae vulnerable. when one academicly examines how we got to this point you will realize it was money manipulation by the federal reserve, and these events throughout history have worked to centralize wealth in the hands of the banking elite and corporate interest. be wary of moe bailouts and social programs we have to take a stand at some point. what s your breaking point. hold the white collar crooks accountable, don't reward their criminal behavior with billions in taxpayer money. and don't let the politicians take control of private business to save us fom depression. join the campaign for liberty

[AMERIKA]

For more than 100 years we have argued about the role of government in our economic life. The trouble is that now we have reached the crisis point and action is required. If we do not act, then we will be back to soup kitchens. Whatever the right answer, once we have stabilized our economy and restored confidence to the banking system, then we can point fingers and hold people accountable. In the end, we have a 14 trillion dollar economy that needs to be propped up for now.

[Chubbster]

"Quick action" Uhh-huh... Just don't expect quick results, as if 10 years of leveraging debt to the moon was no big deal to correct.

[iblog]

Obama said that a balance budget is not the policy to follow. So what if there is debt? What's the true measurement in relation to the rest of the economy. Who's owed?

He said we're going to have to spend our way out of this crises, Get rid of or retool programs that don't work. And stop the bleeding the military complex designed.

It's not ideology, it's just about getting results.

[FearlessFreep]

Just because now isn't the time to reduce the deficit doesn't mean it can be ignored altogether. BO needs to introduce some new taxes. One good idea would be a tax on speculation and currency exchanges. And there's no substitute for a carbon tax.

[democratUSA]

The only question I have about the infrasture project is that most of the jobs will be construction which are usually temporary and not long term. Maybe it will be enough for the economy to rebound somehow. Has anyone looked for a job lately? It's tough!

[iblog]

If you don't use the present corporate model or acquisition and merger, industries as a group profit and prosper from the growth of the other.

[Icantbelieveher]

The fact is that people who have jobs spend money, rather than collecting unemployment and food stamps! It's not enough to get by. They also pay payroll taxes. And when people spend money, they spend them at restaurants, retail, cars, etc. They buy houses!!!!!!! No one is buying anything right now!

Any employment is good employment -- any legitimate employment is good for the country!

[rich misty]

Economics focus

http://www.economist.com/finance/displaystory.cfm?story_id=12852043

Diagnosing depression
Dec 30th 2008
From The Economist print edition

So the Republicans cheered the Bush economy right to the brink of Depression... And unless something is done, quickly, we have a fair chance of going over the brink.

[cayuse]

There is no quick fix. It will take time to create jobs through first government job creation and then tax incentives and tariffs to get jobs back home to stay. Give higher pay for sweat so people get their fair share. Higher pay so we get the genious to create more technology. Stop and break up monopolies so we don't create 1 payroll/accounting/specialty instead of many. That is false productivity.

Then while we are waitng for the stimulus, we stop the rich from making money off of money with tax incentive investment and no risk.

If want to really get stimulated google REIT Timber or MOB. Dracula is loose

[jinxed]

I have to agree with breaking up monopolies but don't forget those "companies too big to let fail" re: AIG etc. that should be broken up as well. That will also include these banks that got bailed out and used the taxpayer money to buy up competitor banks.

I definitely believe in "what goes around comes around" and hopefully it will be their turn!

[drock973]

Wasn't the first stimulus package(the one with the tax rebate checks) supposed to fix everything?

[HappyIdiot2008]

No.

[drock973]

This is the rationale for the package, from Wikipedia(whether or not you consider it a good source is up to you):

"In passing the legislation, lawmakers aimed to stimulate spending by businesses and consumers. They hoped that the targeted individual tax rebates would boost consumer spending and that targeted tax incentives would boost business spending."

"lawmakers hoped to slow or halt the decline in house prices, which threatened the financial well-being of both homeowners and banks or other financial entities holding jumbo mortgages."

[GeoLee]

No, it was aimed to help elect republicans to all the national offices and most Americans saw through that. We know it was the middle class footing the bill for a middle class check to our selves, basically. We are not as stupid and the President thinks. I guess he figured a country that would have elected him in 2004 must have been a country full of stupid people. (He knew the country did not think he was smart enough in 2000 so he had to rely on Daddy's appointees to put him over hte top in the supreme court and brother's cheating ways in Florida to get it to the point of that happening. But remember the majority of voters in 2000 knew he was not the smartest bulb in the chandelier.)

[cayuse]

No, that is goof ball TRICKLE DOWN economic called Milten Freedman MONITARY POLICY. Except his was not around and would not have been in favor of even that. But you can not give me 10 dollars and I owe 10 dollars and it will stimulate. Give me 10 and I buy 10 and it is almose like buying guns instead of butter. Maybe 1 cylce of stimulus

Obama's plan is for Keynesian Economics of Paul Samuelson, that each dollar spent by the government will create 14 dollar cycles of spending through the economy. The construction jobs he wants to create will be give people long term employment that will allow for buying cars, houses, wash machines, etc.

What we need to watch out for is he does not get draked into spending on Monitary Policy or Education, etc. What we need is to get money in the hands of the people and keep it there by stimulating on government job creation from the government job creation

Patients it will take time, but it will be real. In the mean time we can round of all of the crooks that stole and received the bailout

[eremite]

We need that socialism pronto.

[SMP]

sorry Bush, Paulson and Palin are no longer relevant. 17 days and they are HISTORY

only then can we start to build this country from the ground up!!!!

No more top down!!!!

[paixa3]

Bravo to your thoughts. Unfortunately, you do not have a congress that has the cajones to pull that off. They are traitors and corrupt to citizens of the country.

[rockne]

It is a FACT that until early 2008, the average annual rate of inflation and the average annual unemployment rate were lower in the Bush Administration than in the Clinton Administration, even though Bush had to contend with the devastating effects of 9/11. To say that the current financial meltdown is all Bush's fault is FACTUALLY INCORRECT, despite what Barney Frank, Chris Dodd and Frankline Rains say to the contrary. And to believe that a stimulus package of hundreds of billions will solve this meltdown mess is incredibly naive.

[1differentdrummer]

Yes, but what happened to the average annual takehome pay under your heroes? The greeter at WalMart has a job, but does it equal a well-paid manufacturing job that went to China?

[paixa3]

Great point. Average wages at about somewhere in the 1970's real purchasing power and MILLIONS of jobs are overseas.

You will never recover if you do not get your country back in your justice system and congress. Good luck with that.

[Frenbar]

We can also have triple digit inflation if we keep printing dollars by the trillion.

Ever hear of Zimbabwe?

[ThunderclapNewman]

The issue now is deflation.

[iblog]

I kinda like deflation.

Why do people be hatin' on deflation.

The only problem I see is the rich not having the same levels of revenue coming in. Then treating labor as a commodity and using it as it's means of cutting costs.

This change in industry responsibility is what the Congress is trying to get Wall Street and the Big 3 to wake up on.

But all in all. I sure would like the price of bread and milk to go down.

[Frenbar]

Worrying only about what the 'issue now' is, is what has gotten us to this disastrous economic situation. Cooking the books to make sure the next quarter is okay.

Printing trillions of dollars and throwing them at every problem is like putting a disease infected band-aid on a wound. Sooner or later (most likely sooner), other nations are going to get sick of our devaluation of the dollar and stop using US dollars for their currency reserves. You will then see a cascade effect as the dollar becomes worthless overnight.

[rich misty]

As long as the money is tied up in debt instruments we won't see hyperinflation.

But, at some point hyperinflation will become a serious concern... I can only hope that the problem is foreseen and the presses are stopped when the economy starts to turn the corner.

[KingPest05]

Yeah, I think they just started printing 200,000,000$ Bills in Zimbabwe. No joke. Could you imagine trying to find change for that?

[Grunty1]

We've had double digit unemployment for a while now, if we used an accurate metric.

[cayuse]

It is bad, real bad. I think we have the right guy so we have to give him a chance. The walk will have to prove the talk. But his talk so far is stimulating itself compared to the recent past.

Obama know the people need money from jobs to buy commodities. Giving cash to corporations does nothing if no one can buy the production. All this cash give away is only allowing these failed companies to weather the storm so they can do it all over again.

Otherwise the bank would simply lower the interest rates to the people, not themselves. Auto makers would lower the prices to sell more cars. There simply is no demand because there is no jobs.

Billiant Obama.

[paixa3]

Brilliant Obama: Stupid congress?

[Anciano]

Boycott the rest of the Bush consumer economy.

[Anciano]

Here's what all good Americans that voted for Obama can do:
We have taken a vow not to spend one cent on anything we don't have to buy at retail such as food or fuel until the Obama administration is sworn in. Bush’s rebates that added $1200 to our tax liability and his pleas to go shopping show the great importance of consumer spending to the legacy of Republican economics. Bush hijacked the country for the benefit of the wealthy for eight years, so let the wealthy keep the Bush consumer economy going for the next month until the Republicans are rightfully flushed in disgrace.
Learn about and patronize your smaller locally owned businesses and pay cash so it's under the radar of statistics. We're hoarding our discretionary retail spending until the Obama Administration when the recovery can begin. An “unexpected jump in February retail sales" will make a nice White House-warming gift for Obama.
How do business owners participate in the above? Just like household goods and expendables, no buying of any inventory or supplies until Inauguration Day. No repairs or new equipment unless critical. We’re paying our employees to clean and prepare for what we believe is going to be a lot of pent up deliberately withheld and carefully channeled demand come February.