The Deep Insight

Nothing Has Changed: 

Barack Obama’s cure all stimulus bill has been facing heavy resistance from the GOP on the hill  in the last couple of days.  Even though there is Republican opposition to the bill it is expected to clear the House of Representatives today with ease because the Democrats have a large majority in the house.  What happened to the spirit of bi-partisanship that Obama was supposed to usher in with his presidency?  Is the honeymoon already over?  If the vote in the house splits down party lines, which for all purposes it will shows that nothing has changed in Washington.  Partisan bickering will continue for the foreseeable future and  Americans around the country will continue to lose their jobs and their homes. 

Why are the Republicans opposed to the stimulus?

The Republicans oppose the bill because they view it as expensive, wasteful and believe that government spending will not lead to job creation.  They believe that if taxes are lowered for individuals and businesses alike, more money will be put back into the consumers hands to spend on goods and services.  Businesses would be able to expand and create jobs because they would have more capital to spend.  Republicans in Washington believe that the government is inefficient in its spending.  I tend to agree with this position because government does not know the value of money.  They just spend money like there is no tomorrow.  Just take a look at the national debt!! As of right now the national debt is a whopping $10 trillion and counting! I do not want the government spending my tax dollars. They have proved time after time that they can’t spend money wisely.

The Republicans are not without fault though, the Bush era Republicans did their fair share of rubber stamping while President Bush was in office.  When the Democrats took control of the in 2006 they continued the spending spree.  So both parties are to blame but at least the Republicans are trying to stop the status quo.  To me the only ones trying to CHANGE are the Republicans!  We need people in office who will spend wisely and balance the budget.  The buck should stop here, no more passing this tremendous debt to future generations. The government should stay out of the economy!

Obama Will Get What He Wants:

Even with strong Republican opposition, President Obama will get a stimulus bill on his desk by February because there is nothing the Republicans can do to stop it.  He will get the “shovel ready” projects such as money to fix highways, bridges and the like.  How effective this will be in solving the current economic crisis we are mired in remains to be seen.  All I know its going to take more than building roads and funding mass transit to solve this monumental problem.  This issue requires more out of the box thinking than these conventional democrat strategies to fix the economy. How about micro-loans for people who people who want to start a small business? How about a six months freeze on income and pay roll tax?  The government could encourage people to open a savings account with the money that save from a tax freeze. There are so many tools that the government could use to help revive our economy without resorting to spending over a trillion dollars that we don’t have. If you can think of anymore ideas feel free to leave a comment on my page..

What Our Government Is Wasting Our Money On:

For those who want to know what the government will be doing with your hard earned cash, here it is courtesy of Glen Beck:

• $825 billion total (as of 1/15/09)
• $550 billion in new spending, described as thoughtful and carefully targeted priority investments with unprecedented accountability measures built in.
• $275 billion in tax relief ($1,000 tax cut for families, $500 tax cut for individuals through SS payroll deductions)
• $ 90 billion for infrastructure
• $ 87 billion Medicaid aid to states
• $ 79 billion school districts/public colleges to prevent cutbacks
• $ 54 billion to encourage energy production from renewable sources
• $ 41 billion for additional school funding ($14 billion for school modernizations and repairs, $13 billion for Title I, $13 billion for IDEA special education funding, $1 billion for education technology)
• $ 24 billion for “health information technology to prevent medical mistakes, provide better care to patients and introduce cost-saving efficiencies” and “to provide for preventative care and to evaluate the most effective healthcare treatments.”
• $ 16 billion for science/technology ($10 billion for science facilities, research, and instrumentation; $6 billion to expand broadband to rural areas)
• $ 15 billion to increase Pell grants by $500
• $ 6 billion for the ambiguous “higher education modernization.”

[Source: Committee on Appropriations: January 15, 2009]

Here is a further breakdown of the package:

NOTE: The following are highlights of the package; for the full 13-page summary from the Appropriations Committee, click here:

(as of 1/15/09)

Energy
$32 billion: Funding for “smart electricity grid” to reduce waste
$16 billion: Renewable energy tax cuts and a tax credit for research and development on energy-related work, and a multiyear extension of renewable energy production tax credit
$6 billion: Funding to weatherize modest-income homes

Science and Technology
$10 billion: Science facilities
$6 billion: High-speed Internet access for rural and underserved areas

Infrastructure
$30 billion: Transportation projects
$31 billion: Construction and repair of federal buildings and other public infrastructure
$19 billion: Water projects
$10 billion: Rail and mass transit projects

Education
$41 billion: Grants to local school districts
$79 billion: State fiscal relief to prevent cuts in state aid
$21 billion: School modernization ($15.6 billion to increase the Pell grant by $500; $6 billion for higher education modernization)

Health Care
$39 billion: Subsidies to health insurance for unemployed; providing coverage through Medicaid
$87 billion: Help to states with Medicaid
$20 billion: Modernization of health-information technology systems
$4.1 billion: Preventative care

Jobless Benefits
$43 billion for increased unemployment benefits and job training.
$39 billion to support those who lose their jobs by helping them to pay the cost of keeping their employer provided healthcare under COBRA and providing short-term options to be covered by Medicaid.
$20 billion to increase the food stamp benefit by over 13% in order to help defray rising food costs.

Taxes

Individuals:

*$500 per worker, $1,000 per couple tax cut for two years, costing about $140 billion.
*Greater access to the $1,000-per-child tax credit for the working poor.
*Expansion of the earned-income tax credit to include families with three children
*A $2,500 college tuition tax credit.
*Repeal of a requirement that a $7,500 first-time homebuyer tax credit be paid back over time.

Businesses:

*An infusion of cash into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of two.
*Bonus depreciation for businesses investing in new plants and equipment
*Doubling of the amount small businesses can write off for capital investments and new equipment purchases.
*Allowing businesses to claim a tax credit for hiring disconnected youth and veterans

[Sources: Associated Press: Highlights of Senate economic stimulus plan; January 23, 2009; WSJ: Stimulus Package Unveiled; January 16, 2009; Committee on Appropriations: January 15, 2009]

When is the money being is going to be spent, and on what?

The government wouldn’t be able to spend at least one-fourth of a proposed $825 billion economic stimulus plan until after 2010, according to a preliminary report by the Congressional Business Office that suggests it may take longer than expected to boost the economy. The government would spend about $26 billion of the money this year and $110 billion more next year, the report said. About $103 billion would be spent in 2011, while $53 billion would be spent in 2012 and $63 billion between 2013 and 2019.

• Less than $5 billion of the $30 billion set aside for highway spending would be spent within the next two years, the CBO said.

• Only $26 billion out of $274 billion in infrastructure spending would be delivered into the economy by the Sept. 30 end of the budget year, just 7 percent.

• Just one in seven dollars of a huge $18.5 billion investment in energy efficiency and renewable energy programs would be spent within a year and a half.

• About $907 million of a $6 billion plan to expand broadband access in rural and other underserved areas would be spent by 2011, CBO said.

• Just one-fourth of clean drinking water projects can be completed by October of next year.

• $275 billion worth of tax cuts to 95 percent of filers and a huge infusion of help for state governments is to be distributed into the economy more quickly.

[Note: The CBO’s analysis applied only to 40 percent of the overall stimulus bill, and doesn’t cover tax cuts or efforts; a CBO report outlining all of its costs is expected in the next week or so.]

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