New Stimulus May Make It Easier to Get Cash Now
New stimulus plan directed at job creation
President Obama may make it easier for consumers to find cash now that he’s proposing a new economic stimulus plan. This week he encouraged Congress to approve a new wave of spending to spur on recovery. Although it will increase the national deficit to a record $3.8 trillion, according to the president it will provide a huge advantage for the American people.
The proposed stimulus is directed at worker tax cuts, unemployment assistance, business tax relief, and funding for state governments. President Obama requested $300 billion for the new recession-relief and job-creation initiative.
Unemployment is the crux
The president is focusing on the national unemployment rate, which is expected to hover around 10% through 2010. Experts contend that without some job-rate turnaround, other economic recovery projects will be in vain. The president is also aware that without some visible change to the jobless rate, his own midterm elections are threatened. Unemployment problems could also affect his re-election in 2012.
President urges cutbacks
In addition to the money proposed for the new stimulus, the president encouraged legislators across the nation to continue cutting back on spending and programs. According to Whitehouse.gov, President Obama has said, “I am asking Republicans and Democrats alike to take a fresh look at programs they have supported in the past to see what is working and what is not, and trim back accordingly.” A financial audit of all budgets is hoped to be instrumental in turning the economy around.
Critics of the plan
Many of President Obama’s plans include cutting back on payments to farmers above a certain tax bracket. They also require ending the purchase of C-17 cargo planes for the military. Critics are noting that the latter move is likely to create a firestorm from legislators in California since that is where the planes are built. In addition, there will be tax increases for the wealthy and new fees imposed on financial institutions. Though these cuts are promoted as measures to bring in millions of dollars, critics are saying they won’t generate much cash now that the deficit is so overwhelming. On >News.yahoo.com (See: http://news.yahoo.com/s/ap/20100202/ap_on_bi_ge/us_budget), New Hampshire Senator Judd Gregg said, “[Legislators] are not willing to do big ideas. They are doing ideas that create perception but don’t do anything big…Take the spending freeze for example, you are talking about $10 billion on a $1.6 trillion deficit.”
The role of business in the mix
President Obama’s initiative centers on businesses and promises to create a maximum $5,000 tax credit for each new worker a business hires. The goal is to encourage hiring by mid- to large-size businesses. If businesses get behind the issue, so the argument goes, the country can chip away at the unemployment rate. That in turn, will give people money to start spending again. Without money being put back into the economy, the turnaround will be that much slower. As the president said, “We will do what it takes to create jobs. It is essential.”
The economy in 2010
Finding cash now that a new initiative is in the works may become easier. President Obama is hopeful that businesses will create jobs, people will start spending, and the economy will turn around. Although it may take some time, the plan is to spur businesses and taxpayers into working together to usher the recession into the past.