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Is Obama's stimulus package working?


john6503 9 / 27  
Jul 9, 2009   #1
After Barack Obama was elected as U.S. president, he propsed $787 bilion stimulus package to encourage people for more spending which in turn, create more jobs and rescue America from the current economy crisis.

Unlike his high hope, unemployment rate is now skyrocketing which marked 9.6 percent in June from 9.4 percent in May. That would mark a 26 year high. This is also much higher than initial projection of Obama administration of 8 percent unemployment rate followed by stimulus package.

This rising rate comes as a result of recession-weary companies continue to cut workers. This is linked to shutdown at General Motors Corp and fallout from the troubled auto industry. Many believe that it could rise as high as 10.7 percent by the second quarter of next year before it starts to make a slow descent.

In addtion to this high unemployment rate, the country's deficit is the highest ever in history even more than the time during Bush administration.

Obama is repeatedly saying that this stimulus pacakage will eventually creat more jobs and employ more workers in those construction industry. But when he said "creating more jobs", does that accounts for people who also lost their jobs in the same timeframe. Let's say 1000 jobs have been created followed by stimulus package, but within that time, 2000 people lost their jobs. In that case, do you see that as more jobs created?

Even if he did create jobs by employing more construction workers needed for building new infrastructure in important industiral regions, aren't they just temporary workers who will soon be dismissed once their jobs are done?

Those are just my opinions based on news articles I read on daily basis.I enjoy reading newspapers and I try to keep track of every political and economic issues around the globe, especially U.S. since their decisions have huge impacts on other nations. I want to hear what you guys think on this issue and give me some feedback on my writing as well:)

Rich Monte 2 / 94 2  
Jul 9, 2009   #2
People need to realize that by the term 'stimulus package' hide the greatest robbery in the human kind.

What exactly is 'stimulus package'? It is PRINTING MONEY out of nothing. The only thing it can and will create is INFLATION. Now you can still buy a loaf of bread for $2, but after the 'stimulus packages' have been completed, the same loaf of bread will cost $5. It applies to each and every product or service. Those who have a job may get a raise of 10 or even 20%, but still if their loaf of bread will cost 250% more then they become poor.

Not to mention that if you plan to go abroad the only option will be Mexico or Cuba because if you plan to go to Europe or Asia you will have to save a few years due to worthless dollar.

Let's say 1000 jobs have been created followed by stimulus package, but within that time, 2000 people lost their jobs. In that case, do you see that as more jobs created?

That comparison makes you a genius (and there are few genius minds in Obama administration;). You got it exactly right, they will maniuplate the public with their stats but only 5-10% of the population will actually think and realize that what they say is untrue.
EF_Sean 6 / 3,491  
Jul 9, 2009   #3
You might want to look at how arbitrarily moving wealth around can be considered stimulus at all. Bear in mind that, unless the Obama government really does want to do what Rich accuses it of, merely printing money in a way that leads to massive inflation, then the stimulus funds have to come, sooner or later, from tax revenue. So, Obama isn't injecting money into the economy. He is taking money out of the economy, in the form of taxes, and then putting it back into the economy somewhere else. This should be the first issue you research to better argue your essay -- whether this type of stimulus can ever, even in theory, be useful (There are arguments on both sides. Keynesian economists would say, yes, for instance).

Now, taxes come from all citizens, across the board (primarily from the large swath of people who consider themselves middle class. The poor have no real income to tax, and spend too little to yield much in sales taxes, and the truly rich can afford to game the system to avoid paying too much).

The stimulus funds go to specific groups within American society. Oddly, they have been targeted mainly at groups that tend to actively support the Democratic party. (And if the Republicans had stayed in power, you can guess that the groups would be different, but the principle the same). So, for instance, the auto union, having helped to destroy GM, now ends up with a large ownership stake in a zombie company kept shambling along by gov't stimulus. Democratic activist groups, such as ACORN, also find their political loyalty rewarded. So this should be the second issue you should research -- who is actually going to benefit from this bill?

Like most government interventions in the economy, the Obama stimulus package exists for political rather than economic reasons. The current recession is just that, a recession, that has led to unemployment figures very much like those of past recessions. Most government action on the matter is undertaken so that the government seems responsive and in control. Most of it doesn't really do anything at all, and a great deal probably actually makes the situation worse, unless the actions in question involve removing government interference from the market.
OP john6503 9 / 27  
Jul 9, 2009   #4
What exactly is 'stimulus package'? It is PRINTING MONEY out of nothing

I can't help agree more on you that. How do government suppose to generate more money when they are in the huge hole. It like the person who is encumbered with debt just bought a brand-new ferrari for his girlfriend expecting for lamborghini in return. It just doesn't make sense.

Also, let's say those $787 billion covered by tax revenue from U.S. citizens, but now Obama administration has propsed a new tax-cut for more spending?

I don't see how things are going to work out as he planned
Rich Monte 2 / 94 2  
Jul 9, 2009   #5
Well, it *still* may make sense for the US to print money because they hold China hostage. They know China - that in fact sponsors the US economy - won't be willing to move away from the dollar quickly because when they do the inflation will sky-rocket and the Chinese economy would go down. China now holds most of their wealth in US dollars so they artificially 'care' for it not to go down too much. But the fact is that the US as a country is a bankrupt because the majority of their business model was providing banking and stock market services (ie. speculation) and there was few who actually did the job (because the real job was done by the Chinese).

Let's hope war will not have to be the only solution to this crisis.
EF_Sean 6 / 3,491  
Jul 9, 2009   #6
Hmmm . . . so far we all seem to be in agreement. This won't do. This won't do at all.

So, Obama's stimulus plan is a vital piece of legislation necessary to kick start the U.S. economy out of deep recession. Basic Keynesian economics tells us that the economy goes through cycles of boom and bust, and that the government needs to provide stimulus in the bust cycles to keep them from getting too bad and destroying capitalism itself, as Marx predicted and as actually happened in Eastern Europe over a century ago.

Moreover, most of the provisions in the bill merely direct funds to areas that needed them anyway. For instance, the bill provides tax relief, which is widely considered even by Democratic opponents to be good for the economy. It also provides spending increases on education and infrastructure, both of which are proven social investments that pay for themselves over time. Better educated people earn more over their lifetimes, for instance, and so pay more taxes. Businesses are more likely to locate new plants and offices in areas in which the basic infrastructure is well maintained.

OW! I can't do it anymore . . . writing in favor of the bill is too painful. But these are the sort of counter arguments you can expect to encounter, and if you want your essay to be convincing to anyone who does not already share your views, you are going to have to deal with them in your essay.
Rich Monte 2 / 94 2  
Jul 9, 2009   #7
Basic Keynesian economics tells us that the economy goes through cycles of boom and bust, and that the government needs to provide stimulus in the bust cycles to keep them from getting too bad and destroying capitalism itself, as Marx predicted and as actually happened in Eastern Europe over a century ago.

But we have XXI century now. Let's assume all countries started to just print money, would that change anything?

The fact is that capitalism in the dead end now. Capitalism needs DEBT (and slaves to pay back debt throughout their lives) to survive. When the slaves lose their jobs as it's right now then the system gets broken.
EF_Sean 6 / 3,491  
Jul 9, 2009   #8
The fact is that capitalism in the dead end now. Capitalism needs DEBT (and slaves to pay back debt throughout their lives) to survive. When the slaves lose their jobs as it's right now then the system gets broken.

None of this makes any sense. I assume you have a series of unstated premises that allow this to be something other than a string of meaningless words to you, but unless you make those premises explicit, you are unlikely to convince anyone of your position. Why should capitalism need debt? And where in any of the capitalist countries do you see slavery still being practiced? I do hope you are not equating the necessity of working for a living with the state of slavery, which would show a horrible ignorance of what actual slavery was like.
Rich Monte 2 / 94 2  
Jul 10, 2009   #9
You don't get it..

Assume you are 20 and you've just finished college. You haven't even started working but you already have to pay your college debt. Then you start a job and take a 30-year mortgage (another debt). In the meantime you take a car loan (another debt). So basically until you retire you pay out your debts.

But you probably didn't know that the lobbysts have established the law that the banks have 'the legal right' to lend you 8 times more money than you gave them. So if you have a $1,000 saving account in CityBank (for example) then this bank can lend another client 8*$1,000=$8,000 rightaway! Out of nothing. They can lend money they do not have! On top of that, they *assume* (legally, again) that whoever had a mortgage loan with them has actually paid it to them in full so that they could give more 8-times-multiplied loans rightaway! So if someone had a mortgage for a 1 million dollar home, they could give a loan of 8 million dollars on the same date to another institution. That is the REAL problem and that's what caused the 'crisis' in the first place. Money for banks means nothing because they could virtually print it out of nothing and they are probably surprised what's all the fuss about their 'stimululs' proposal.
EF_Sean 6 / 3,491  
Jul 10, 2009   #10
Assume you are 20 and you've just finished college. You haven't even started working but you already have to pay your college debt. Then you start a job and take a 30-year mortgage (another debt). In the meantime you take a car loan (another debt). So basically until you retire you pay out your debts.

Even if this were so, being able to choose your profession, where you work and at what, would make it very different from slavery. Plus, at least two of those debts are voluntary. A college education is arguably necessary to have a real future in today's society, but state universities have tuition low enough that one could work one's way through without incurring crippling debt. As to the other two, both are matters of purely personal choice. One can easily rent, instead of buying a house, if one wishes not to incur a mortgage, and no one living in a major urban center needs a car. You may lament the fact that so many people choose to live beyond their means on a system of credit, but that hardly makes the system comparable to slavery.

You are right that the banking system encourages artificial wealth creation, and that the reserve requirements should be higher, though your description of the system is flawed, a caricature rather than a realistic portrayal of their policies.
Notoman 20 / 419  
Jul 10, 2009   #11
Let me comment first on your essay . . . I think that it is well thought out. You have strong vocabulary. You seem to be missing a lot of articles though (a, an, and the). They are little words that readers tend to gloss over, but when they are missing, it disturbs the flow. The use of articles in English is a *very* complicated thing. Some nouns need them while others don't. Native English speakers tend to instinctively know when something sounds off. Here are a few examples from your writing to demonstrate what I mean:

he propsed a $787 bilion stimulus package

the unemployment rate is now skyrocketing

much higher than the initial projection of the Obama administration (or you could drop the word the from in front of Obama and instead say Obama's administration) of 8 percent unemployment rate followed by the stimulus package.

Bush administration. Again, you would either need to say the Bush administration or Bush's administration.

employ more workers in thosethe construction industry.

Now I will comment on Obama's stimulus package . . . Keep in mind that I am just a high school kid and my political knowledge is limited by my age, education, and experience. Heck, I am not even old enough to vote.

The United States government needs to expect more responsibility and self reliance from its citizens. Instead of a chicken-in-every-pot our current administration adheres to the axiom that there ought to be a car in every garage--attached to a three or four-bedroom house--and it is the government's responsibility to make this American dream a reality at taxpayer expense. The government should not be in the business of providing subsidies and stimulus money to individuals for such purchases. I believe that the government should provide a safety net for its most vulnerable citizens, but that safety net does not need to be lined in the finest silk. This redistribution of wealth using tax money is a travesty. There are other provisions of the stimulus package that I find very disturbing, but this aspect chaps my hide the most. Individuals, and governments for that matter, must learn to live within their means.

I admire Jefferson's political philosophies (you could say that he is my patron saint of politics). He believed in small government and individual liberties; "a wise and frugal government, which shall restrain men from injuring one another." The number of federal employees, including postal workers and members of the military, was under 10,000 in Jefferson's day. Today the behemoth that is our federal government employs over three million--and that is just the federal government. Jefferson would be appalled by our current state of affairs. In a 1802 letter, Jefferson proclaimed, "I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." If he saw the mess created by sub prime mortgages and proposed government bailouts, he'd say the same thing today.

We are creating huge debt for future generations to contend with just so we can be more comfortable today. One figure I found online said that each taxpayer's portion of the national debt is now at $51,880 . . . every citizen is on the hook for $23,551, and my family of four would be responsible for $94,204. And the government wants to increase that debt through subsidies to individuals, corporations, and pork-barrel spending? *SIGH*
EF_Sean 6 / 3,491  
Jul 10, 2009   #12
Notoman, have you ever considered a career in journalism? Your off the cuff response to the situation is better written than many articles I've read that presumably were published after a great deal of revision.
Notoman 20 / 419  
Jul 10, 2009   #13
Ah, thank you Sean! Journalism is a very competitive field and talented writers are a dime a dozen. I think I will be a rock star instead (insert wry smile here).

I have no idea what I want to be when I grow up, but I am leaning toward history teacher . . . four months of paid vacation and a planning period (or two) every day to catch up. History is my best subject and I enjoy everything about it. I work as a lifeguard right now. It is the perfect job for a lazy teenager. Most days we will get a thirty-minute break for every fifteen minutes we are on the stand.
EF_Sean 6 / 3,491  
Jul 11, 2009   #14
Ah, yes. So many of us who are drawn to English or the humanities are drawn too towards teaching. Just make sure you can handle the idea of having to teach a bunch of students, who, for the most part, won't care about the topic you have to teach.
EF_Simone 2 / 1,986  
Jul 11, 2009   #15
Noto, I think you will be an excellent history teacher, if that's the field you elect to pursue. The key will be to make the subject interesting to your students, which the best history teachers are able to do.


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