Rumors have been flying about what effect President-elect Barack Obama’s administration will have on payday loans. Rumors also have been flying about his planned stimulus package, which is reported to cost more than $700 billion.
- Obama is writing an “American Recovery and Reinvestment Plan.” Cross your fingers!
Unfortunately, at this point, pretty much all we have is rumors. Very few details have been released about the future President’s plans. But here are the ones that have been reported.
What’s in a name?
For starters, we know the name of this plan: the “American Recovery and Reinvestment Plan.” Several different articles have wildly different ideas about how much ARRP will cost. I have seen estimates from $700 billion all the way up to $1 trillion. So I won’t speculate about that; I’ll just say, “We’ll see.”
So, the “recovery” part of the title is pretty easy to understand. America broke its economy, and now it needs to heal. So what about this reinvestment business? What does Obama plan to reinvest in?
The long and short of it
Obama has said that his plan will create jobs in the short-term and spur economic growth in the long-term. He also said the focus of the plan is to provide assistance to middle and low-income Americans. So he is going to invest in jobs and people. With the news we have so far, it seems payday loans won’t be directly affected by the stimulus plan.
He is also going to invest in “states that are struggling with falling revenues,” according to the Huffington Post. He wants to create or preserve more than 3 million jobs over the next two years. No word on what percentage will be created versus preserved, but I guess that depends on how much worse the economy gets before it starts to get better.
Give more by taking less
It has been reported for some time that Obama plans to provide financial aid for the middle class by providing tax breaks. He also plans to give tax cuts to businesses. In total these tax cuts are rumored to be about $300 billion.
These efforts address the short-term part of his goals. Obama theorizes that giving Americans a little more cash will cause them to spend it, thus pushing up revenue for faltering businesses. He hopes this combined with the business tax cuts will create jobs.
Building bridges
Another thing Obama plans to invest in is the nation’s infrastructure. That means roads, bridges, water mains, you know, the man-made physical makeup of our country.
But wait — isn’t this plan supposed to stimulate the economy? Why, yes it is. The idea is that the program would create jobs for road workers, and people with jobs are what make the economy go ’round. Last month, a broken water main in Maryland highlighted just how much work our infrastructure needs. Strengthening a water main is much cheaper than repairing it and cleaning up after it breaks.
That about sums it up. Obama plans to invest in people, jobs, infrastructure and state revenue in order to help the econmy recover. There is no official word yet about how Obama feels about payday loans, but the money blog will keep you posted.
Who does the money go to? Bush’s tax rebate ended up being used wisely by most Americans to pay down credit card debt.Therefore very little went into purchases and not much happened to rev up the economy.
It will be interesting to follow what happens.
Perhaps this may just be what the American people need. I mean, we all know that the operations under the current administration are out of hand and are clearly not doing any good to the economy. Even still, although Obama’s economic recovery plan sound like sweet music to my ears, the extent of this plan, good or bad, is yet to be seen.
lats just wait and see what happens