Since last year, the economy has been in a known recession due to various reasons such as the war, inflation, and the stock market. 2008 was an election year and because our country is in such a state of emergency, the presidential elections were a huge part of solving this problem. John McCain and Barack Obama ran against each other, and by November 4, 2008, Obama was declared the victor.
Of course, the inauguration was exciting, but now that the celebration has worn off, it is very important that Obama proves himself as a leader. It’s “time for change” as his campaign slogan once said. In the first month of his presidency, he reversed a few of George W. Bush’s old policies and also started a few of his own. His first really big project is the economy, and he outlines how he plans to fix it in his stimulus plan.
The main goal of this strategy is to pull the country back on its feet quickly and effectively. About $75 billion of stimulus is to be put into the economy through tax cuts and also getting money to people immediately. Also, an additional $45 billion will be set aside in case the economy deteriorates further.
Our failing economy is affecting everyone in the US, but especially those of us who live in California. First of all, employment rates have been taking a nosedive over the last couple of months. In California, it’s at over 10%, but in Stanislaus County, it’s at over 13%. That’s also only counting those who receive unemployment benefits. It’s even been estimated that we could be at over 16% percent by the end of this year.
More and more Americans continue to lose their jobs as more large companies are closing. Circuit City, an electronics store, dropped around thirty-five thousand employees because it is closing. Mervyn’s, a popular clothing store, also went out of business. It seems that if your job isn’t safe, the only option right now is to be unemployed, or take a pay cut. This coupled with the inflation also means that Americans are working harder and making less money to buy things that cost more than they used to.
The housing market also hit homeowners pretty hard. For those who couldn’t afford to pay mortgage anymore, their homes were foreclosed. For those who want to sell their home, they might find that their house will sell for far less than for what it is worth. Although it probably is a good time to buy a home because they’re cheap, who knows where the economy will be in the next few years.
It seems that as unemployment began to rise, so did everything else. Inflation makes groceries and other necessities very costly. Health care is so expensive that many people are calling for socialized health care, so that it’s free for all. Cars are so expensive to maintain although gas rates have seemed to level off for the time being. College tuition is hardly affordable and almost no one can make it without a couple of student loans.
All of these issues are reasons why President Obama needs to take care of the economy quickly. It’s outlined and broken down into about six steps. Altogether, they should bring together $75 billion in stimulus and leave some for reserve, as originally proposed.
The first step is an immediate $250 tax cut for all workers and their families. The hope in this is to immediately get money to the Americans who need it, and to also improve the state of the economy. However, if the economy continues its declining course, an extra $250 in tax cuts should be allotted.
For people who are unable to work, Obama plans on providing a temporary $250 bonus for seniors who make low to middle income. It is probably harder for people who live off of fixed incomes to deal with the recession, so Obama proposed a $250 one time addition to their Social Security benefits. Similar to the first step, if the economy continues to plummet, an additional $250 will temporarily be added.
To help homeowners who are currently stuck in a rut, the third part of the stimulus plan is to set aside a $10 billion fund to aid families in avoiding home foreclosure. This will allow people to remain in their homes and to help them to renegotiate with lenders who had given them loans that are now difficult to pay off. This fund will be called the Foreclosure Prevention Fund and will provide relief for the failing housing markets.
Another $10 billion fund will be provided for states where the economy is hitting hardest. Temporary funding would be provided immediately so that the recession doesn’t worsen in these places.
Finally, to offer stability for people who are currently unemployed, Obama plans to extend and expand the unemployment insurance program. Many people who are unemployed tend to be older and it’s harder for them to find new employment. Also, it’s harder to re-enter the job market after being unemployed for so long. This expansion would only be temporary, but would help people who are unemployed to restart their careers.
Besides all of this, Obama also offers to lower power bills by adding about three thousand miles in electrical lines, and also making more capacity for renewable energy. Not only would this lower power bills, we’d also be contributing to a greener planet and a cleaner way of life.
As anxiety over the economy surmounts, now truly is the time for change, and hopefully, Obama’s stimulus plan will pull our country back on its feet.