A few weeks ago, Barack Obama signed the $787bn stimulus plan after weeks of political wrangling. He hopes the signing of this plan means the end of the economic problems of today.The economic stimulus plan has three posts. At the beginning, this hopeful plan includes a lot of measures, such as tax cuts, which are created to maximize its political support.
Further, a big part of the money will be spend on aid to states to close their budget gaps. With the signing of this plan, the government hopes to create or save jobs. The US jobless rate is surging, measures has to be taken to make the employment better in the US.
Finally, the last portion is money to invest in infrastructure projects. Roads, bridges, classrooms,… are in bad condition. This money creates a possibility and an opportunity to repair it.
The big stimulus plan has been proposed because the US economy is suffering from the worst crisis since the 1930s. Without this plan, the financial crisis could last well into 2010. The signing of this plan has the intention to make the economic situation better.
The plan is supported by 246 Democrats. Almost 200 Republicans were against. The original plan was delayed by wrangling between Democrats and Republicans. The first version of the plan hadn’t any Republican support. Modifications were necessary to gain the support of moderate Republicans, so Democrats accepted a plan with more tax cuts and less money for aid to states and local governments.
To realize this plan, they have to borrow money, but the US budget deficit is already so high this year. According to the US government, this measures are temporary. After a time, it will bring the budget back into balance.
At first sight, I thought this plan was an excellent idea. Jobs will be saved or created, Americans have to pay less taxes,… In short, I was pleased to hear that Obama tries to make an end on the economic troubles.
But after reading this article, I changed my mind. In my opinion, this plan is really too rosy. I have one essential question: “How will it be paid for?”. The US budget deficit is already that high. According to me, this plan is too expensive for the United States. This plan could push up the cost of government borrowing. The future US generation will be a victim of the troubles of today, because they will have to pay the borrowing costs.
Source: http://news.bbc.co.uk/2/hi/business/7874407.stm
I agree with Hanne on the part that it will be difficult for Obama to realize this plan. It will cost a lot of money but a country like the U.S. can handle this. I think we have to wait and see and after that we can take conclusions.
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