Critical Thinking Decision-Making Essay

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¶ … Decision Making

2009 Stimulus Package I

President Obama's stimulus package, the $787 billion American Recover and Reinvestment Act of 2009, creates jobs and helps the economy. It provides a tax credit of up to $400 to working individuals and $800 to married taxpayers filing jointly, as well as numerous other tax breaks for individuals and small businesses. It gives fiscal relief to both federal agencies and state governments, monies to infrastructure and science, protects more vulnerable Americans, provides $59 billion for healthcare, supports education and training, and supplies funding for alternative energy to the tune of $43 billion (Doughroller, n.d.).

The New York Times, December 9, 2009, said this: "...But by November (2009), with a quarter of the funds out the door, a consensus had developed among analysts across a wide range of views that the stimulus package, messy as it is, was working."

"The legislation, a variety of economists say, is helping an economy in free fall a year ago to grow again and shed fewer jobs than it otherwise would. Mr.

Obama's promise to "save or create" about 3.5 million jobs by the end of 2010

is roughly on track, though far more jobs are being saved than created, especially among states and cities using their money to avoid cutting teachers, police officers and other workers" (NYTimes, 2009).Get full Download Microsoft Word File access
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Essay on Critical Thinking Decision-Making Assignment

Obama administration officials take pride in the fact that the package has restored some amount of confidence in the stumbling U.S. economy. They also feel it will support a slow recovery of the economy over the next two to three years, even as President Obama outlined plans for further job creation. He has included incentives to hire workers for small business, and added dollars to construct the transportation network, especially highways, but also non-transportation related construction projects. Additional rebates for homeowners who invest in energy-saving weatherizing projects, along with the other additional tasks mentioned, will raise the current cost of the program. The optimism is that the additional costs might be offset by a couple hundred billion dollars less spending on the financial institution bailout.

What the legislation is primarily accomplishing right now in the area of jobs is to stifle the continued increase in jobs lost. Instead, the stimulus has helped the economy to essentially bottom out and save existing jobs rather than create new ones. This is especially evident in cities where monies are being utilized to avoid cuts to teachers, public servants and others.

We must pay attention to the fact that the Obama administration promised to save or create approximately 3.5 million jobs. This was not a pledge to create that many new positions, but a combination of saving and creating. That being the case, all somewhat educated estimates state that his goal is within reach within the next year, which is the timeframe originally stated (NYTimes, 2009).

Much is made of the fact that President Obama's administration officials originally had forecast that the stimulus would save or create 600,000 jobs by the middle of 2009 and what a failure it's been. By July, two million more jobs had been lost, and estimates at the time said that the stimulus had only saved around 150,000 jobs. However, a look at the bottom line tells us that, when the original stimulus package -- a proposed long-term fix to our economic woes -- was passed, 700,000 jobs a month were being lost. In November, 2009, 11,000 jobs were lost. This is an incredible 98% improvement. Certainly one can argue that, though things are far from perfect and many are still out of work, the stimulus is on a path to recovery in the job market.

"The U.S. economy improved in 10 of the Federal Reserve's 12 districts last month, marking a broadening of the recovery, the central bank said today" (Bloomberg, 2010). "While economic activity remains at a low level, conditions have improved modestly further, the Fed said..."

In most districts, holiday consumer spending was "slightly greater" in 2009 than the year before. Manufacturing improved or held steady in most of the Fed's districts. The report "suggests the economy is very gradually gaining steam. The risks of a dip back into recession are

declining," according to Zach Pandl, an economist at Nomura Securities International Inc. In New York (Bloomberg, 2010). Thomas Hoenig, president of the Fed Bank of Kansas City supported that statement and looks for a modest and persistent recovery. He forecasts growth of 3 to 3.5% in 2010. Sales at major retailers like TXJ and Sears reported significant improvement in sales over the holiday shopping season. And though, according to Bloomberg, the labor market "remains soft," hiring of temporary workers through staffing firms has been reported higher in New York, Cleveland, Chicago, and Dallas (Bloomberg, 2010).

Gross Domestic Product (GDP) is the total market value of all final goods and services produced in a country in a given year. During the last quarter of 2009, the U.S. GDP, which is considered by most economic experts as the broadest measure of economic activity, rose at an annual rate of 5.7% (Isidore, 2010). That's huge, and far stronger than expected. It indicates that a stronger economy is in the process and that certain programs under the 2009 stimulus package are having an effect.

"Economic growth in the third quarter was greatly attributed to the federal stimulus bill passed at the beginning of 2009...Money pumped into the economy by tax cuts, such as the first-time home buyer tax credit, coupled with spending by businesses that received stimulus dollars did have an impact in the (fourth) quarter..." (Isidore, 2010).

The sources used for this report are all "third-party" and relatively objective on the subject of the stimulus. Their credentials vary, but the validity of their arguments and data are backed up by the numbers, as reported here. Most have no player in the game so to speak and yet all agree, with some minor exceptions that the economy is recovering and that the stimulus package, either in part or whole has much to do with it, though not all. There is also support found here that the stimulus has helped the job situation and is now creating or saving jobs as opposed to losing them. Our original argument and follow-on conclusions are valid.

2009 Stimulus Package II

President Obama's stimulus package, the $787 billion American Recover and Reinvestment Act of 2009, has not created enough jobs and its exorbitant cost has hurt the economy.

Yes, it is true that the economy grew at an annual rate of 5.7% in the last quarter of 2009.

However, more than half of that growth was created by inventory adjustments from large and small businesses that probably will not be repeated any time soon. At best, inventory adjustments and the growth they created are evidence that the weak economy is on a long-term recovery path, but definitely not that is it healthy (Editorial, 2010).

Government stimulus spending did impact this positive growth. But, the amount of spending will decline in 2010, and some of the recent growth was due to businesses taking advantage of investment tax breaks before their expiration in December, 2009.

It will take jobs to continue the recovery, and the country is about ten million jobs short with no burst of growth in jobs anywhere on the charts. There is no question the economy is still in a deep hole, and without some impetus towards more jobs, things could get worse before they get better (Editorial, 2010).

There is an argument being put forth by Republicans along with a smattering of Democrats that the huge deficits caused by Obama's spending and the huge costs of the stimulus are the most serious problem and must be fixed.

President Obama has admitted that he is worried by the deficit that he has helped create, and he has, out of necessity, put forth proposals to cut federal discretionary spending in next year's budget. It might seem too little too late. Along with the minor savings that might save, he seems intent on continuing to blame the whole thing on the Bush administration. And if one looks at Obama's recent favorability ratings, that is getting old to the American public.

And that positive news about only 11,000 jobs being lost in November, 2009 -- the lowest rate in a very long time? Let's look at December, 2009. Unemployment rates rose in 43 states.

Four states -- Delaware, Florida, North Carolina and South Carolina -- scored record high jobless rates in the last month of last year. New Jersey broke a 33-year-old unemployment record with 10.1%, and New York reached a 26-year high. (Associated Press, 2010).

Experts across the board claim that the economy is recovering at too slow a rate to produce steady job creation. Nationwide trends show the same data. In some states, the only reason the jobless rates stabilized was that workers gave up looking for work and, essentially, dropped out of the labor force and out of the unemployment statistics.… [END OF PREVIEW] . . . READ MORE

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