Tuesday, December 8, 2009

Obama Urges Major New Stimulus, Jobs Spending

From The Dallas Morning News. Unaltered. No commentary necessary. Use the video below as a soundtrack.

WASHINGTON (AP) -- President Barack Obama called for a major new burst of federal spending Tuesday, aiming to jolt the wobbly economy into a stronger recovery and reduce painfully persistent double-digit unemployment.

Despite Republican criticism concerning record federal deficits, Obama said the U.S. must continue to "spend our way out of this recession" as long as so many people are out of work. More than 7 million Americans have lost their jobs since the recession began two years ago, and the jobless rate stands at 10 percent, a statistic Obama called "staggering."

Congressional approval would be required for the new spending, the amount unspecified but sure to be at least tens of billions of dollars.

"We avoided the depression many feared," Obama said in a speech at the Brookings Institution, a Washington think tank. But, he added, "Our work is far from done."

It was the third time in a week the president had presided over a high-profile event on jobs, responding to rising pleas in Congress that he spend more time discussing unemployment as midterm election season draws near.

Obama proposed new spending for highway and bridge construction, for small business tax cuts and for retrofitting millions of homes to make them more energy-efficient. He said he wanted to extend economic stimulus programs to keep unemployment insurance from expiring for millions of out-of-work Americans and to help laid-off workers keep their health insurance. He proposed an additional $250 apiece in stimulus spending for seniors and veterans and aid to state and local governments to discourage them from laying off teachers, police officers and firefighters.

He did not give a price tag for the new package but said he would work with Congress on deciding how to pay for it.
Proposals in Congress being advanced by Democratic leaders that cover much the same ground would add up to $170 billion or more. Administration aides suggested the infrastructure proposals alone being weighed by the president could cost about $50 billion.

Republicans ridiculed the president's speech and his parallel call for doing more to hold down government deficits.

"At least the president's proposal will result in one new job - he'll need to hire a magician to make this new deficit spending appear fiscally responsible," said Sen. Judd Gregg of New Hampshire, the senior Republican on the Senate Budget Committee. House GOP leader John Boehner of Ohio declared the president "out of ideas and out of touch."

While Obama did not propose the kind of direct federal public works jobs that were created in the 1930s, he said government action could set the stage for more job creation by private business. Many of his proposals would extend or expand programs included in the mammoth $787 billion stimulus package passed last winter.

While acknowledging increasing concerns in Congress and among the public over the nation's growing debt, Obama said critics present a "false choice" between paying down deficits and investing in job creation and economic growth.

"Even as we have had to spend our way out of this recession in the near term, we have begun to make the hard choices necessary to get our country on a more stable fiscal footing in the long run," he said.

To find money to pay for the new programs, the administration is pointing to the Treasury Department's report on Monday that it expects to get back $200 billion in taxpayer-approved bank bailout funds faster than expected.

Obama suggested this windfall would help the government spend money on job creation at the same time it eats into the nation's debt, which now totals $12 trillion.


Anonymous said...

I'm thinking about applying Obama's principles of finance to my own situation. First, I'm going to go out and buy an Aston Martin. I've got no business buying one in the first place because there's no way I can afford it. But once it's repossessed I'll buy a BMW 740. Normally I wouldn't be able to afford that either, but with this plan it'll be a piece of cake. I'll just pay for it with all the money I save from not having the Aston Martin anymore.


TarrantLibertyGuy said...

Couldn't you find a Skype Crying Chain to use as the soundtrack?

And see, I told you that Stephen was a great student of the economic black arts...

The Whited Sepulchre said...

The only thing missing from your analogy is the Money Printing aspect of the deal. That's what makes me nuts.

For a future post, I've been trying to think of something that would combine things like the Aston Martin/BMW trade-in and the inflationary aspect of printing money for all the payments. I'm drawing a blank.

Don't tell anybody, but I usually go through SMS's back catalogue when I'm hunting for economics metaphors.

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