How will the Obama stimulus package create jobs and stimulate the economy?

Arguably the most important metric of our economy's health is the GDP and government spending in general will help increase GDP which will keep economist from classifying us as in depression.

The tax cuts and jobs that will be created by government projects are separate parts of the plan... Would not be suprised if banking is nationalized (as has been discussed in media headlines over the past few days). The idea with tax cuts is that, given more money consumers will spend more money on goods and services (good for this economy). Problem is, with the uncertainty people will most likely save this money (bad for this economy) so most would argue cutting taxes is bad for the economy -or- at best a risky gamble. Why are including tax breaks if they won't help? Probably more of an appeasement measure for Republicans who believe under any circumstance it's the people and private sector in general who should be responsible for getting the economy moving and not government. They downplay or disregard the deregulation and lack of checks and balances that put us in the mess and the only message from we seem to hear is fear tactic on the dangers of big-government and looming Socialism. In spite of the fear mongering, just yesterday it was reported Obama is holding to his pre-election promise to oppose reinactment of the Fairness Doctrine (disproving something every right-wing conservative talk show host has been claiming he would do since the middle of last year, more flaws in their perspective will be revealed in the coming months)

http://www.foxnews.com/politics/first100days/2009/...

Stimulus package concept can be boiled down to "You have to spend money to make money", problem is the plan spends borrowed money... debt we have no guarantee we can even find a buyer for.

The stimulus does not address the heart of the problem: It all boils down to unethical actions in the banking/finance sector. Our society is driven by acquisition of wealth (the one with the most toys wins) and unfortunately we have modeled this for the rest of the world.

Greed which is a by product of the Capitalist idea (let me go out and make as much money as possible for myself regardless of who I step on as long as it's done so legally). Over two decades of gradual deregulation brought in (in part) by special interest lobbying has paved the way for Corporations to continue to find unethical ways to make more and more money. That's the prelude and studying that will help you understand how we got here. On a more micro level the mortgage crisis is what's in the spotlight at the moment and is the real culprit in the sh!t hitting the fan. People were lent money to buy homes when they should have been declined. This happened because there were huge profits to be made in these bad loans and as our culture dictates everyone is focused on their individual wealth as opposed to the greater good of the country... I'm not condoning Socialism, but Capitalism left unchecked and unregulated has gotten us where we are today. You'll hear many Republicans screaming on the radio and in the media in general about the dangers of big-government.... They don't seem to realize reform has to come now and Capitalism as we know it has failed. They won't agree with this because it shakes the foundation of everything they believe in and they really believe if nothing is done things will just naturally sort themselves out...

I believe through reform we'll bounce back (although according to the media there is 30% or so probability of catastrophic failure... let's not define 'catastrophic failure' other than to say society as you know it would be a distant memory)

The stimulus package is one step in the we've-got-to-do-something direction. Many other steps must follow. Nationalization of the banking system needs to happen and has the potential to have the most significant impact as then credit can begin being issued again. As it stands now, even with bailout money the banks are still refusing to take risk on loans. As Corporate entities they are bound by law to uphold in the interest of their shareholders over the common good. That system won't work to get us back to where we need to be. They need to be more focused on the common good and the only way to do that without redefining the Corporation's rights is for government to take over banking.... When it comes to the auto makers bankruptcy and restructuring probably makes the most sense. The big problem is the way unions are taxing the American auto industry. These US auto markers are trying to compete with Toyota, Honda, BMW, Audi, etc.., who are not only building a better quality product, but they are doing so cheaper than we are. Also the practice of loaning money to those who shouldn't qualify extends to the auto industry. Chrysler, GM and Ford all operate their own financial groups. Ford may be the only US automaker to survive. In a true free market system Chrysler and GM should fail, but no one wants that.... My problem with the GOP is that they seem in a state delusion about the severity of where we are. They had eight years in the White House in which time much could have been done to stop the mess, instead they raced us down this path along with a magnitude of other poor decisions that destroyed the balance sheet Bill Clinton left. Now like a spoiled child each of them cry out Socialism at every turn of the new administration. They really don't get it. Or maybe they do (should things get way out of hand and social unrest lead to civil war, no doubt they will be the first targets)

Rebuilding investor confidence will take a long time.

I do believe if we do not change the parameters of Capitalism we are all destine to poverty and the streets I'm glad we have an administration in office now that seems to understand the issues and that the GOP is being kept at bay while the Dems get a shot at fixing this...

The concept of fiscal stimulus, is that you let government borrow more money in times of crisis, and then you have them either spend it or use it for tax cuts. It is done to keep the wheels going, and shorten the recession, when firms start laying off people.

Government spending will always have a greater effect in the end than tax cuts. Most economist will agree on that. That is because you know that every dollar spend by the government, will in always in some way or form end up going to a job for some. Whereas tax cuts doesn't have to be spend, but often is saved instead, and then don't help the economy. It has been estimated that about 87% of the 2008 tax cuts were either saved or used to pay down debt, and therefore did not go help the economy.

The reason why people argue for tax cuts anyways, and the the reason why there is also tax cuts in the "Obama stimulus", is because tax cuts can come to effect faster. Therefore tax cuts can come at the time the economy needs it most. Government spending often take some time to start up. It takes some time start a highway project, and stuff like that. It has been estimated that about half of the 2009 stimulus plan will not come to effect before into 2010. That is a long time to wait, and maybe the recession will already over by then.

Mandrake is a magician.

I could write an entire dissertation beginning in 1932, but that would take too long.

Let me just say this.

When we finally came out the Great Depression, even though Roosevelt spent a bunch of money, about 1/2 Trillion dollars in today's value, then WW II came along.

We did not have anywhere close to our national debt. We did not have a mortgage crises. We did not have credit cards. We had a huge surplus in trade. We had the largest manufacturing base in the world.

We produced our way out of the depression. During WW II, there was very little to buy. Shoes & hand bags were rationed, 3 pairs shoes per year, no cars to buy, no appliances to buy, tires were rationed, and scarce.

Every one saved money.

After the war, production and sales went crazy. Every one was buying, all the returning vets, 6 month waiting lists for new cars. Imagine the demand for shoes, manufactured in US. Radios, most everything. Things progressed into electronics up to the present time.

All made in US.

We do not have that manufacturing base any longer.

Can you say, "China"?

Our next crises is coming in commercial real estate.

Who will occupy all those vacant buildings? In the '80s a sign was seen on a building in Atlanta, "Buy one, get one free".

It was as bad in Houston, TX. I went through it.

Let me end with this.

The 1980's were far worse than today..

Unemployment stood at 10 1/2 %. We are now at 7 1/2 %.

Our great Mandrake says it is worse than the Great Depression.

I don't think so. President Reagan brought us through the '80s.

I spent 50 years in retail business. I remember 7 recessions.

This is the worst. But, Mandrake will have to use his best magic.

You, as a young person, have my utmost and sincere wishes for prosperity. You and your children and grandchildren, (and mine), will pay the price for that stimulus pkg., with more to come.

This too will pass, but not this year nor the next.

I hope I'm wrong.

I can say to you that your new head of state is going to try a Keynesian fiscal stimulus as opposed to monetarist laissez faire - the preferred option of the Republican presidencies. Whether it wil work is another matter. Something similar is being tried in Britain, though, the money involved is about 1/6 as much.

To really succeed, a country needs a freem arket economy with SENSIBLE levels of state intervention. Things are getting out of control and any new jobs created are likely to be short term. That said, we do need to create a system that is truly FAIR and which cannot be messed around with by economic vultures.

It depends on your point of view if it will work or not but here is the basic plan.

You create 3.5M jobs.

You cut taxes for "working" Americans.

Those are the top things and here is how you get it done.

Infrastructure projects, building etc.

Immediately people are being put to work in my state of Florida 200k people are starting to work alone.

The tax cuts are cuts they just are refunds.

This stimulates the economy because people will buy stuff.

When stores are selling items they can higher people.

When people are working they can buy stuff.

Etc. etc. etc.

That is the main principle of a entirely too complicated plan to get into on Y!A.

Hope I helped.

Look at the bill itself and you will get more understanding of it. Go to recovery.gov

personally ..giving teachers more money doesnt stimulate anything..the bill is a joke