Essay on Obama Economic Policy

The election campaign of Barack Obama was held under the banner of decisive changes in all spheres of social, economic and political life of the country. The scale of these changes is visually presented in the 10-year budget plan recently unveiled by President Obama. With $ 787 billion in reanimation of the economy, Barack Obama hopes to halve the US federal budget deficit by the end of his first presidential term.

The signing ceremony was not held in the US capital in Washington, but in the capital of Colorado, Denver. It was symbolic. It was in Denver that the congress of the Democratic Party took place, which nominated Obama for the presidency. In addition, Obama seemed to emphasize that the new Plan has nothing to do with the old bureaucratic games of republican Washington. It is no coincidence that the president was introduced to the audience in the building of the Historical Museum of History and that he was represented not by the state governor, not vice president Joe Biden, but by the owner of the small Namaste Solar Electric enterprise Blake Jones. It produces solar panels, and alternative energy is not given the last place in the presidential plan.

In his speech, Barack Obama said that the goal of the law he signed was to inject new life into the “American dream”, to return people to work, and with it dignity. The President said, and this is in fact the case, that the passed law is the most “expensive” in the history of the United States.

The goal of the plan is to reduce the budget deficit, which now stands at $ 1.3 trillion dollars, to 533 billion by 2013. The reduction will be achieved due to the reduction of spending on the war in Iraq, the reorganization of the government, the strengthening of the country’s energy independence, the abolition of tax benefits for those Americans whose annual income exceeds $ 250,000.

The plan includes huge government spending, increased taxation of corporations and wealthy Americans.

According to Obama, the plan to stimulate the economy is not only a plan to combat the current crisis, but also a kind of bridge that is being thrown into the future. Not without reason did he several times compare the technologies of the 19th and 20th centuries with the technologies of the present century, emphasizing that the old technologies no longer work. For example, he said that the railways built during the presidency of Dwight Eisenhower should be replaced by modern, more efficient ones. The same applies to the means of transmitting information and electricity. Obama noted that since the time of Edison, mankind has stepped far forward and that now there are new sources of energy – wind, sun and so on.

He said that if the United States wants to be competitive tomorrow, then it should provide better education opportunities for children today. That the Plan is not simply aimed at overcoming unemployment, but at ensuring that the work that those who lose it will receive is aimed at building the future of the United States.

“We won’t be able to achieve economic growth without curbing the deficit,” and he promised that his budget would be prudent with regard to investments, honest with respect to reporting, and he would put the president’s strategy “on necessary investments, reducing unnecessary expenses and restoring fiscal discipline” on the shelves. Obama’s budget involves establishing a universal healthcare system and reducing US dependence on foreign oil.

One of the main ideas of the Obama and Biden program is to make the US economy competitive through the use of energy-saving technologies.

The second direction: the preservation of homes from families through the repayment of their mortgage debts.

Third: restoring confidence in the financial market. Americans love precision so that every family can understand what action is being taken.

This specificity allows people to feel more relaxed, and investors to stop sitting on money and start investing in projects. This program is a roadmap for the entry of the American economy into the 21st century. Similar approaches to stimulate innovation exist in China, partly in the Eurozone.

In the energy part, the plan includes a complete transition to electric cars, and intermediate hybrid cars. Now they are completely rebuilding their auto industry. For example, starting this year, when buying a car with a hybrid engine, the American will be given a tax deduction of $ 7 thousand (despite the fact that the average price of the car itself is $ 20-25 thousand). The difference in price between a gasoline engine and a hybrid ($ 5800-6200) is returned to the buyer and partially to the manufacturer. Thus, production and consumption of new technologies are stimulated.

Also, twice in 10 years (10% each year), budgetary allocations for basic science will be increased. It is planned to give tax incentives for installing solar panels on the house and encourage parents to ride their children to the school on a bicycle rather than a car, etc.

Each house will be equipped with solar panels, and where it is windy, wind generators and other alternative sources will be installed there, which will be connected to a common energy network. Small businesses will also generate energy and supply to the network. By doing so, they will remove energy dependence on dictatorial countries that have resources, and will begin to redraw the world in a new way, regardless of the opinions of other countries.

On December 15, President-elect Barack Obama even officially announced the appointment of Nobel laureate in physics Steven Chu as Secretary of Energy. Chu was awarded the Nobel Prize in 1998 and is one of the leading experts in the field of renewable energy. His task in the Obama administration will be to weaken the dependence of the US economy on hydrocarbons and to outline new ways to counter global warming, as During his election campaign, Obama promised to pay special attention to solving these problems. Another couple of tens of billions will be spent on solving environmental problems – as the plan says, people will work to cleanse water, air and land.

A separate line is the modernization of the entire transport infrastructure. As Roosevelt pulled the country out of the Great Depression, starting to build roads, so Obama is going to overcome the crisis, rebuilding these roads. Highways will cost America $ 27.5 billion. They will spend another couple of tens of billions on solving environmental problems – as the plan says, people will work to cleanse water, air and land.

They will not spare money for “education in the 21st century” (this is what this law sounds like). Obama is confident that every American student should receive such an education in order to compete in the future with any employee in the world. Tax subsidies to schools and colleges, tax deductions for citizens, financing of various educational programs – $ 85.2 billion.

Healthcare costs 21 billion. “To save not only jobs, but also health and life …”, Obama is ready to modernize and computerize the entire system, as well as simply give money to medical institutions – let them lower prices for their services.

They will also help directly those who have been left without work. They will be given tax deductions, as well as the opportunity to learn a new profession and find a new job. “Mortgages” who can not cope with payments for their homes, also promised restructuring programs. “Help for people” is estimated at $ 28.4 billion.

Fred Barnes, editor-in-chief of the center-right publication Weekly Standard, believes the president has swung too much. But at the same time, he said that Obama did the right thing by unveiling his goals at the very beginning of his presidency.

The administration discussed various strategies. He chose the one that says: we will do everything at once, and not in stages, as, for example, we will first solve the tax issue, then we will take up health insurance or environmental problems. Barnes, however, adds that Obama’s program is too liberal and could be blocked by Republicans in Congress.

The mobilization of right-wing forces against the president’s plan is already in full swing. Influential radio and television broadcaster Rush Limbaugh recently rushed a ruthless criticism of Obama, saying that it’s so strange that I honestly and openly wish failure of Barack Obama’s attempts to restructure and reform our country so that capitalism and personal freedom cease to be its foundation? Why should I wish him success.

GOP leaders criticize Barack Obama’s response to the economic crisis, calling the president’s plan “irresponsible.” According to them, this plan will cause an increase in taxes and federal debt, and that the president has too many hopes for spending and does not pay enough attention to tax cuts.

But if Obama manages to bring through at least some parts of the plan through Congress, the country will undergo the most serious ideological changes since the reign of President Reagan (from 1981 to 1989). Ronald Reagan emphasized tax cuts and government spending. According to analysts, Obama may return the country to the left ideas of President Roosevelt, implemented during the Great Depression of the 1930s.

According to analysts, now many, though far from all, recognize that the state should play an important role in times of economic crisis. In 1933, this idea was much more controversial. But this debate is again gaining momentum among Republicans in Congress.

Wisconsin Rep. Paul Ryan, for example, says the approval of the Obama plan will lead to the largest public sector enlargement since Roosevelt’s New Deal.

Nevertheless, many observers believe that Obama was able to convince the people of the need for decisive action by the state to get out of the recession.

“They are right or wrong, but most Americans have decided that Obama is their last hope for overcoming our nationwide troubles. And if it’s not the best option, then at least it’s the only one for the next 4 years, ”says Tom DeFrank, chief of the Washington bureau of the New York newspaper Daily News.

The results of the last two opinion polls confirm its correctness. According to statistics, the rating of the presidential program reaches 60%. And the president’s personal rating is even much higher; the fact that Obama is supported not only by Democrats, but also ordinary Republicans and independents is especially significant.

Political scientists and observers may disagree about Obama’s decision to do everything right away, but they agree on one thing – his strategy is daring and potentially risky.

“Both the success and the fiasco of the president’s policies will be historic,” says Larry Sabato, director of the Center for Political Science at the University of Virginia. – I consider his plan to be similar in scale to the New Deal or the program of the Great Society of President Johnson. It can be supported. It can be rejected. But he is undeniably grandiose. ”

A grandiose plan is accompanied by a grandiose risk. Obama is betting that the economic situation will improve sooner than opinion polls begin to show a weakening of popular support for both himself and his plan.

These are the general characteristics of an economic stimulus plan. It is expensive, but, according to experts, it is far from enough to rescue the country from the economic crisis. However, Obama, both in his speech in Denver and in his other speeches, repeatedly emphasized that the Economic Stimulation Plan is only the first step. Some knowledgeable circles say that perhaps in the second half of this year another similar Plan will be announced.

Programs for which funds are allocated

Social sphere

  1. Education
    1. Construction and modernization, technical re-equipment of primary and higher schools – 20 billion
    2. Teacher retraining, computer and scientific laboratories in the classrooms – 1 billion
    3. $ 500 increase in government scholarships for students – 15,6 billion
    4. Support for working college students – 490 million
    5. Grants for disabled children – 13 billion
  2. The medicine
    1. Computerization of healthcare and improvement of information technology – 20 billion
    2. Prevention of chronic diseases, infectious diseases, vaccination – 3 billion
    3. Research to identify the most effective medicines – 1 billion
    4. Clinic Update – 1 billion
    5. Medical Assistance to Uninsured Americans – 500 million
  3. The fight against unemployment
    1. Creation of up to 1 million jobs for youth in summer – 1,2 billion
    2. Development of programs for workers and youth in new sectors of the economy – 2,8 billion
    3. Assisting people with disabilities in getting a job – 500 million
    4. Help the unemployed in finding work through the employment service – 500 million
    5. Job Support for Low-Income Older Americans – 120 million
    6. Maintaining a program of benefits with rising unemployment – 27 billion
    7. The increase in unemployment benefits from 300 to 400 dollars per month – 9 billion
  4. Other
    1. Providing street children with food and transportation – 66 million
    2. Childcare assistance for working parents – 2 billion
    3. Providing food assistance to the poor – 20 billion
    4. Organization of mobile dining rooms for the elderly – 200 million
    5. Providing schoolchildren with free meals – 726 million
    6. Assistance to poor and senior citizens (7.5 million people) – 4,2 billion
    7. Helping low-income families pay electricity bills – 1 billion
  5. Economics and Production
    1. Modernization of energy networks – 11 billion
    2. Housing modernization to increase energy saving – 2.5 billion.
    3. The development of the suburban railway system and light ground transportation – 1 billion.
    4. Purchase of buses and equipment to increase passenger flow – 6 billion.
    5. Water supply and sewage systems, waste disposal in rural areas – 1.5 billion.
    6. Agricultural research and development – 209 million
    7. Construction of roads and bridges – 30 billion.
  6. Business
    1. Support for domestic manufacturers of modern batteries for automobiles – 2 billion.
    2. Support for the domestic auto industry: replacing old cars of the federal government with new – 600 million
    3. Stimulating the development of wireless Internet access – 6 billion.
    4. Guaranteed loans to small businesses – 430 million
    5. Program for the cleaning of former industrial facilities, closed military bases for their use for other purposes – 400 million.