Obama Unveils $120 Billion Economic Stimulus Plan

[DeepModem Mom]

Source: NYT/AP

By THE ASSOCIATED PRESS
Published: January 13, 2008

LAS VEGAS (AP) -- Democrat Barack Obama on Sunday unveiled an economic stimulus package costing up to $120 billion that his campaign said would put money in the hands of workers and seniors, stem the foreclosure crisis and cover state budget shortfalls....Obama, a senator from Illinois, called on the government to make available a $250 tax credit to 150 million workers to offset the payroll tax paid on the first $8,100 of earnings. He urged a further $250 tax credit per worker if employment declines three months in a row. He also would give a one-time, $250 payment to Social Security recipients who would not benefit from the tax credit, followed by another $250 payment if employment declines three months straight.

The immediate relief would cost $75 billion, plus another $45 billion if the economy weakened.

Obama also pledged $10 billion to increase pre-foreclosure counseling and help ''responsible homeowners'' refinance their mortgages or sell their homes. The plan also calls for $10 billion to help states and local governments facing budget problems as a result of the housing crisis, caused by falling property values and sales tax revenue.

Obama also wants $10 billion to extend unemployment insurance while loosening the eligibility criteria to include many part-time and nontraditional workers....

Austan Goolsbee, a senior economic policy adviser to Obama, said the plan was slightly larger than the $110 billion package advocated by Obama's chief rival, Sen. Hillary Rodham Clinton, on Friday. Goolsbee said Obama's plan would have a more immediate impact because checks for tax credits and Social Security payments could be issued right away, while Clinton's plan to subsidize such things as higher heating bills would require an application process....The Clinton campaign noted her plan would offer more assistance on housing than Obama's -- $30 billion in total -- and touted her proposal to impose a moratorium on subprime-loan-based foreclosures and freeze subprime mortgage lending rates....

Read more: http://www.nytimes.com/aponline/us/AP-Obama-Economy.html

[ursi]

1. From that last part, Clinton's plan will keep the housing market artificially high

Good effort on Obama's plan for when he gets into the White House and faces the worst economic mess since almost 100 years ago, thanks to Bush.

[dkf]

2. How in the world are we supposed to judge these plans

Unless all we say is "yay money!"

[DaLittle Kitty]

3. Notice Obama Once Again ... Followed John Edwards?

Hill and Obama Are Pathetic!

[depakid]

4. So, where's the money coming from?

[Skittles]

7. details would be his shortfall

this is HOPE

[Rosa Luxemburg]

13. by not fighting the war in Iraq?

:evilgrin:

[TheFarseer]

27. Chinese banks

or maybe Arab banks.

[UpInArms]

5. $70 billion - $120 billion

the first liar just doesn't stand a chance!

[jasmine621]

12. How will he pay for it? This is beginning to look like

something people won't understand.

[seriousstan]

6. So I guess the Bush tax credit worked? Obama want to give me $500. WOW

I'll buy me another house.

[Wcross]

8. Nobody is going to buy their way out of this one.

This is a hard core recession/depression approaching. Throwing 120 billion at it will do nothing. I AM disappointed that they have started trying to "buy" votes in the primaries though. I would like to see some realistic plans on the economy, none of this crap. Obama has lost a lot of credibility with me if he really thinks this would help. He is almost as clueless as Clinton. I hope Edwards doesn't make the same mistake. I hope he has a clue so I can vote for him in the primary.

I will still vote for any of the three, I just hope I can vote for the BEST of the three.

[stray cat]

9. I'm not sure about these stimulus spending plans

[harmonicon]

10. literally and metaphorically,

free universal healthcare would get us a hell of a lot further to getting better than would a coupon for band-aids.

[PittPoliSci]

11. only will delay the inevitable collapse

prolonged economic growth comes from creating productive, well paying jobs. this is like putting a band-aid on an amputated limb, it's grossly insufficient and shamefully disguised as a solution to the economic woes in this country.

[Rosa Luxemburg]

14. future generations will be lumbered with a huge debt!

HUGE!

[Wcross]

17. They already ARE saddled with huge debt.

We can NOT SPEND OUR WAY to prosperity. It doesn't work for individuals & it won't work for our government.
Repeal the Bush tax cuts & lift the cap on social security income. Even doing these two things we are still in deep trouble.

[Rosa Luxemburg]

18. I think the voters need to be made aware of Bush's mess

I think Bush has got off the hook. His actions have conributed to the enormous debt. I don't know how we are going to pay for social security. The average person has no knowledge of how bad it is.

[Wcross]

25. Although Bush has had a HUGE negative influence, it has been brewing for years.

We have an system that can NOT sustain itself. Social security, medicare & medicaid consumes 45% of all government revenues. There are only two ways to solve the problem, reduce benefits or increase revenues. Cutting other areas of government spending will help briefly but this has been a problem well before Jimmy Carter. The system needs changing, we might even have to implement "means testing" in order to qualify for benefits. People are just living longer than when the program was designed & medical procedures have become more expensive. My best advice for young folks is DO NOT count on ANYTHING being there for you in your old age.

It is a problem NO politician wants to touch. There is NO WAY he/she will gain political capital by doing what needs to be done. How can you get re-elected by telling people they will get no benefits if they have the means to take care of themselves? How can you get re-elected by telling people they will have to pay the full 14% social security tax on every dollar they earn? How can a politician hope to be reelected when they advocate less "end of life care" for our elderly?

I am 44 years old and I am not counting on ANY of those programs being available for me.

[DLnyc]

29. Missed at least one way.

1. Raise the 'cap' after which Soc Sec tax is not collected (about $85,000 now, I think). Knowlegeable people have told me, and common sense says it's true, that simply raising the cap, to, say, 200,000, would bring in plenty of money to fund social security without cutting benefits.

Basically, Social Security is okay if funding is slightly increased. Republicans would rather kill the program than fix it, so they resist simple measures to fix the funding.

on edit: Also, what about cutting the $600 billion defense budget, which is over ten times larger any other country's?

[PittPoliSci]

20. it worked during the second world war.

it all just depends what you are spending your money on. education, building an infrastructure, those will bring you prosperity. wasting money on a war that is going nowhere while racking up debt will cripple your economy.

[DLnyc]

21. Correction: repeal the 80=90% of * tax cuts that go to EXTREMELY WEALTHY

people. IMHO.

Another idea would be to cut something out of our $600 billion 'defense' budget (ten times larger than any other countries military budget).

Also, we CAN spend our way to prosperity. It was done by FDR in the 1930's. Difference is, though, he put the money into productive jobs programs, instead of just feeding money into the economy, or blowing things up in the Middle East.

[Wcross]

26. 120 billion is just pissing in the wind. n/t

[Hekate]

15. Wonder if this will be "specific" enough for those who've complained he offers no specifics....

Probably not.

Hekate

[juajen]

16. Let me see, what's that song?

"Can't buy me love?"

[Javaman]

19. Is there money for alternative energy? I just quickly glanced at it.nt

[DLnyc]

22. I would rather see tax shift and jobs

1. A SHIFT of taxes back up to the very wealthy and to excessively large corporations and off of the poor and middle class might be helpful.

2. More important, what used to be well-established most effective way of dealing with a recession, before klepto-capitalism became God, would be massive, productive jobs programs. Like, say, emergency efforts to develop alternative energy sources.

Obama and HRC have both lost me with their "throw lots of money at it" approach, plus their (continued) failure to point out that *'s "tax cuts" are really tax SHIFTS from his rich buddies and onto us.

What's the point of electing Democrats, if they can't even handle the most basic economic points?

[Doctor_J]

23. Krugman doesn't think much of it

http://www.nytimes.com/2008/01/14/opinion/14krugman.html

"The Obama campaign’s initial response to the latest wave of bad economic news was, I’m sorry to say, disreputable: Mr. Obama’s top economic adviser claimed that the long-term tax-cut plan the candidate announced months ago is just what we need to keep the slump from “morphing into a drastic decline in consumer spending.” Hmm: claiming that the candidate is all-seeing, and that a tax cut originally proposed for other reasons is also a recession-fighting measure — doesn’t that sound familiar?

Anyway, on Sunday Mr. Obama came out with a real stimulus plan. As was the case with his health care plan, which fell short of universal coverage, his stimulus proposal is similar to those of the other Democratic candidates, but tilted to the right.

For example, the Obama plan appears to contain none of the alternative energy initiatives that are in both the Edwards and Clinton proposals, and emphasizes across-the-board tax cuts over both aid to the hardest-hit families and help for state and local governments. I know that Mr. Obama’s supporters hate to hear this, but he really is less progressive than his rivals on matters of domestic policy."

[redqueen]

24. I think his words will fall on deaf ears, sadly. (nt)

[Skittles]

31. it f***ing STINKS

people need to stop their hero worship

[TheFarseer]

28. I don't know why we feel

we have to over-rule natural boom and bust cycles in the economy. Obviously, if there's something like the great depression, you need to act but this is nothing along those lines. I have a real problem with borrowing money to throw at problems that will correct themselves. We only dig our grave deeper by doing things like this.

[DLnyc]

30. I think if one looks closely, one finds that "we" don't feel that; rather

large banks and corporations feel that. When demand cools off, businesses could lower prices a bit--bad for them but good for the rest of us. The powerful business interests will generally lean on government to 'stimulate' the economy so that they can keep their prices, and profits, high. I often wonder whether the rest of us might benefit more from a policy that said "you guys made lots of money when things were booming, now you're gonna make a little less for a while. Lower your prices."

From the 1930's up to today, it seems to me the talk has shifted gradually from "help out the average person, too bad if big conglomerates loose out" to "help out the companies that donate millions to our campaigns, too bad if the average person looses out".

Just my 2 cents, I guess.