The Stimulus Package
The stimulus package signed by the President in February has received its fare share of criticism; even in its earlier stages, it received no votes of the 178 republicans in the House. After it was signed, members of the G.O.P. and some economists have accused it of being a temporary fix for a much deeper problem. Now, with Vice President Biden admitting the Obama administration "misread how bad the economy was" and the unemployment rate at the highest its been in 26 years (9.5%, dangerously approaching double digits), things are looking worse for the Democrat's solution to America's economic disaster. But before we begin the unavoidable blame game in a world where politics and money are tied to the hip, let's explore the bill itself from an unbiased, simple point of view.
The $787 billion dollars will be divided into ten categories that make up our society; numerous sections inside the Government, People affected by the economic downturn, education, healthcare, alternative energy, science and technology research, transportation and infrastructure, business, and state and local government. The funding for each ranges from $325 million to $98 billion.
A large topic of discussion is how this package can keep states out of debt. California has racked up an unprecedented amount of debt, and will receive nearly 14% of the $58 billion devoted to state and local governments. Other states that need a boost will receive it in a more concentrated area, like Michigan's $200 million for job training, presumably for the jobs lost in Detroit. Though larger states will naturally receive more money, per capita, the state receiving the least is Florida. This is especially a problem for local CPAs, because in this economic climate, auditors have to be wary of how clients will be affected.
Another staggering amount of money that will be closely linked to the population is the $36 billion for people affected by the bad economy. There will be aid for low-income families for child care assistance, re-employment for the jobless, and rural housing. About $40 million will go towards the farming industry and $1 billion for the Community Service Block Grant Program.
Education and Energy receive about $42 billion each, with a focus on higher education and innovative technology respectfully. Science and Technological research will get around $13 billion, mostly put toward the National Telecommunications and Information Administration. One of the least funded but most controversial faction of the stimulus package is Healthcare, which will get $18 billion.
The Big Picture aside, the stimulus package has many perks for the average American. 1st time house buyers can receive a tax credit for up to $8000 if the buy before December 1st, 2009. Buying a car or motorcycle this year will allow you to deduct state and local taxes if you make under $125,000. These are just a few of the examples of what the stimulus package will do for a good portion of the country.
The main problem with the bill is that it is not keeping up with the rate of jobs lost. People who are without work cannot afford to stimulate the economy, so we are left in what appears to be a "wait and see" situation; that is, will we stay afloat long enough to ride out the unemployment high, or will a different route be taken. Will there be a second stimulus package? Will Republicans gain power and enforce tax cuts? One thing everyone can agree on, though, is that this will not be fixed in one month, year, or even presidential term. We spent a long time getting ourselves into this mess, so we'll have to work for just as long to get out of it.
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