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Following our discussion in the Year 12 lesson today about Obama's fiscal stimulus, I saw this graphic in The Guardian which shows how $838bn will be distributed across the economy. $637bn will be in the form of a variety of spending projects and the remaining $182bn in tax cuts. According to The Guardian ... 'Obama's spending bill, which will be funded entirely by the taxpayer, aims to create or save millons of jobs by beginning work on thousands of New Deal-style projects to renew the country's crumbling infrastructure. It also provides aid for the unemployed, help for schoolchildren and students, and various energy measures.' The aim is to get the US out of recession as soon as possible. Billions of dollars will be spent on bridges, roads, waterworks and sewage disposal. Another big area of expenditure is education. The congressional budget office estimates the bill would create between 1.3m and 3.9m jobs by the end of 2009. US unemployment is 7.6%, about 11million people.
How will this spending 'be funded entirely by the taxpayer? Can you explain how increases in spending by the government and tax cuts will create jobs?
1 comment:
Personally speaking i think the fiscal package of $838bn will be a substantial injection to the US economy , not only will it fullfill some of their unemplyment in which it is around 7% but it will also be good in the long run , as it will hopfully sustain a low unemployment and maybe there economy will grow. On the other side, these "jobs" sound only short term as they wont always be spending such a significant sum of money to improve the infrastructure. A lareg segment of the package has been aimed in education ( educational grants, programs & school renovations) this amount to $145bn , is this really goign to stimulate the economy ....
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