Obama’s new stimulus package creates jobs through green investments


In case you took a vacation from the news this weekend, here’s what you missed: On Saturday, Obama announced a new economic stimulus plan to create more jobs (phew!). And the best part: The proposal would invest in large-scale green initiatives.

In light of the country’s dire economic straits, Obama plans to enact a sweeping stimulus plan—costing in the realm of $150 billion to $700 billion dollars—to create or preserve 2.5 million jobs and breathe life into a rapidly deteriorating economy. Not only would the plan lower the unemployment rate, it would invest in renewable energy and clean tech.

 

From Sunday’s Washington Post:

Obama said his plan would launch “a two-year nationwide effort to jump-start job creation in America and lay the foundation for a strong and growing economy. We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels,” as well as producing fuel-efficient cars.

While Obama hasn’t gone into specifics about exactly how the money would break down (or even hard numbers about how much this will all cost), the fact that he’s involving environmental initiatives from the get-go is a sign that this administration is poised to become the polar opposite of the Bush administration. Luckily for environmentalists, the president-elect seems to be from the school of thought that believes saving the economy and saving the environment are not mutually exclusive ideas.

Depending on how the plan shakes out, it could represent a step towards a “Green New Deal,” which many world leaders have recently called for. Already, economists are comparing Obama’s proposals to those of FDR in 1933, who poured funding into a slew of public works projects (like the environmentally minded Civilian Conservation Corps) to bolster a faltering economy.

But before you start celebrating a win for greenies, be warned: Obama himself acknowledges that passing a plan with such a ginormous price tag will be difficult.

More from the Washington Post:

There also is no assurance that Congress will approve such large package. Republicans, particularly in the Senate, have resisted additional spending on the economy. While Democrats will have stronger majorities in both chambers in January, Obama acknowledged that “passing this plan won’t be easy.” He called on both Republicans and Democrats to offer “ideas and suggestions.”

For comparison’s sake, when Bill Clinton took office in 1993 he proposed a $16 billion stimulus plan which was ultimately blocked in the Senate. Granted, times are far more ominous now than they were in ’93, but it shows the kind of resistance a huge economic stimulus package could be up against.

 

Obama plans on announcing his economic team today. Let’s hope his picks have the chops to boost the economy and improve the state of the environment.

 

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Comments

Instead of investing directly into green initiatives, Obama should offer 15% cash back to any corporate or public pension plan willing to invest in socially responsible infrastructure projects. Now the government would only be spending 15 cents for every dollar they helped put to work, and at the same time helping underfunded pension plans meet their future obligations. His $700 billion would actually represent $4.67 trillion of investment, and pension plans would get $700 billion of guaranteed excess return. This kills two birds with one very expensive and inflationary stone - although I certainly don't support bird-killing.

Only 2 percent of the money is earmarked for clean energy and only 1/7th of that will be spent over the next 2 years. Instead, most of the money is earmarked to expand about 150 different government agencies.

More and more consumers are seeking personal bailouts in the form of payday loans as the economy continues to shrink. Also, more consumers than ever before believe that the financial crisis won’t get better any time soon. President Barack Obama believed that the access to payday loan is an important factor for the economy to stay on track. He also announced that he will be sending out checks to certain states that have nearly depleted their funding for Medicare, so some of the quick loans they are expecting will be arriving early. The Medicare and Medicaid systems are both beginning to experience shortfalls and are expected to be close to bankruptcy within the next 20 years. Social Security is also right behind those two, so getting some payday loans in now, and getting down to work on the problem is a good move.

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