1/13/2008

Obama Stimulus Package

Here are the components of Obama's proposal:

1.Cut $250 checks for some 150 million low and middle income workers and send them out. If needed, send out an additional $250 per worker, totaling $500 for these workers

2.Likewise, send $250 to seniors earning under $50,000 as a Social Security supplement, and and prepared to send out a second $250 payment

3.Establish a $10 billion fund to help “responsible” families avoid foreclosure. The money would be given to homeowners who did not lie about their incomes and were “mindful of personal responsibility.”

4.Provides money to state and local governments hardest hit by housing crisis to prevent them from slashing infrastructure and other important state spending

5. Expand unemployment insurance


Can you say Keynesian economics? The problem with this is that the money has to come from someplace else. Obama doesn't want to pay for this with taxes, but then you have to borrow the money. Borrowing takes it away from other uses as much as taxes.

The subprime problem was due to government regulation and point 3 will encourage home buyers to take more risks because they will believe that the government will bail them out.

Point 5 is political and will be pushed to increase the unemployment rate before the election. Never have the Democrats before asked for an extension in benefits with an unemployment rate as low as 5 percent.

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4 Comments:

Anonymous Anonymous said...

Hi, I'm from New Zealand and not so familier with US regulations. How did these laws cause the sub-prime mess?

1/14/2008 4:50 AM  
Anonymous Anonymous said...

Because the us government was contolled by that a-hole bush

11/07/2008 8:32 PM  
Blogger Ellen said...

To "Anonymous" from NZ: last fall I found this Sept. 18th blog helpful to understand the mess:
http://www.xanga.com/jojobaDESIGNS/674929183/unscrambling-the-mortgage-crisis--a-simple-explanation.html

Combined with the blog author's explanations are laws passed by congress in 1999 and 2000 that loosened bank regulations that had been put in place as early as 1933 to help avoid this kind of meltdown. Use a search engine to look at other articles about this.

1/11/2009 9:48 AM  
Blogger Art Lutschaunig said...

John, you are right on.. Try this on for size:

http://ajluts.blogspot.com/

3/09/2009 1:15 AM  

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