Comparison of Obamas Economic Relief Plan With Prior 3 Presidents


In regards to President elect, Barack Obama, I  have confidence in his capability, and believe he may be able to finally enact and execute what former great Presidents, such as F.D.R. and Lyndon Johnson arranged during their administrations:  A  social infused society.  I want to profile how Obama’s decision will affect my life personally.  I consider myself to be an average citizen.  I have employable skills yet have not completed my bachelor degree. I am currently unemployed and have been so since May 2007.  My job skills are in the customer service field,  but as the economy began to fall, these types of employment opportunities have shrank, as business leaders cut budgets, or transfer customer service positions to 3rd world nations such as India (ex. Amazon.com).

 

The last time I was employed was 05-2007.  I was working for a great internet shoe company, that recently (11-2008) announced a downsize of 8% of the staff.  I live in Las Vegas, Nevada.  The current unemployment rate is 7.1%, when I first moved to Las Vegas; the employment rate was 4.3%. I am currently experiencing the effect of this increase and believe it will only get worst, as local casino announce profit lost and job reductions.  The highest the unemployment records has ever been in Las Vegas, Nevada was 10.7% December 1982.  During that time Ronald Reagan has just taken office and created an economic plan to pull the nation out of the current recession.

 

There are several means by which economic growth has been achieved.  During the early 80’s under President Reagan, the means to achieve economic growth was based on four factors: reduce government spending, reduce marginal tax on capital and labor, reduce government regulations, and control the money supply to prevent inflation.[1]  Although these efforts had some success, they also contributed to an adverse effect which particularly disassociated the working class, the reduction of social service funding, and a wider gap between the wealthy and poor.  Medical funds were cut drastically effecting the treatment of the mentally ill.  Reagan’s economic success was a result of, lowing taxes (the lowest rates going to higher income persons) and increasing deficit spending, as theorized by economist Keynesian.  Although these tactics lowered unemployment rates drastically, they also put the United States into a deep debit, by borrowing money domestically and aboard. The end result was a national debit of 3 trillion dollars.[2]

 

Unlike Reagan, President Bill Clinton’s economic plan sort to promote work instead of dependency upon social welfare. To accomplish this Clinton enacted a major expansion of the earn income tax, which was targeted at the working class.[3] Clinton also introduce the Omnibus Budget Reconciliation Act of 1993, which raised taxes of the higher income groups and cut taxes for low income families and small businesses.  The Clinton era was considered to be a great growth economically for Americans.  The Clinton plan placed emphasis on working class Americans, encouraged small business developments, and the lowest unemployment rate in America.  At the beginning of Clintons administration the national unemployment rate was 7.2 by the end of his administration in 2001 it had dropped to 3.9.  There is no doubt that progress and national growth was evident to all Americans during the Clinton administration.

 

  

George W. Bush started his administration with efforts to give back to the American citizen the surplus money the government has acquired under the Clinton administration. Along with the stimulus relief, Bush took to town meeting to push his tax bill cut, which was a $1.3 trillion dollar tax cut.  Against the advice of Federal Reserve Chairman Alan Greenspan and Treasury Secretary Paul O’Neil, Bush continue to push for tax cuts, which some deemed would undermine Social Security and increase the deceit.[4] The Bush administration witness both increases and decreases in the economy and unemployment rates.  During the beginning of his administration the unemployment rate was 4.2%.  It continued to gradually increase to its highest level at 6.3% June 2003, after which it decreased to 4.7% on November 2007. Finally it drastically rose to 6.1% (September 2008).  The influx of the rate change can be contributed to several economic dealings which have occurred during the Bush administration.  In the beginning of his administration Bush sought tax cuts, through 1.) The Economic Growth and Tax Relief Reconciliation Act of 2001, 2.)Job Creation and Worker Assistance Act of 2002  3.)Jobs and Growth Tax Relief Reconciliation Act of 2003. The result was lower overall tax rates and increase of the child tax credit. These cuts were highly critized because they would increase inequality, fail as growth stimulus, and worsen the national budget.[5] The economy during the Bush administration was a state of continuous influx. Some tragic world events sharply changed the administration allocation of funds. After 9/11, the Bush administration increased national defense budget, homeland security and international affairs to pursue wars in Iraq and Afghanistan, costing nearly $800 billion dollars. The Bush administration also saw to approval of several bail out budgets for failing industries within the United States, such as the airline bail out  $15 billion dollars 2001[5], banking bail out $700 billion, mortgage bail out, and the proposed auto industry bail out $700 billion.[6]  These factors along with the war in Iraq, has worsen the national deceit, devalued the dollar and increased industry stiff, that result in industry closure, job lay offs and high unemployment rates.

 

As Obama enters the political scene the stagnation that preceded Reagan is more profound in a dwindling depression. The federal government has already made economic bail outs that total over $2.5 trillion. Unemployment is increasing rising and more depressing the influence this has on the world market in reference to American exchange rates and credit value.  So what is it that Obama has to offer, currently Obama (President-elect) is pushing for the Bush administration to approval another stimulus bill, that would extend unemployment benefits again (the first extension was issued June 30, 2008 by the Bush administration) provide another income tax stimulus, Medicaid funds to states, and $10 billion plus in public work programs to stimulate jobs and economic relief.[7]  Obama has made it clear that upon entering the White house, his administration will enact a tax increase, which is a possible means to pay for the current debit and coming stimulus benefits to come.

 

Will these plans of Obama work for me. The Medicaid relief would be very much needed. Currently under the Bush plan $45 billion will be cut from Medicaid shifting this cost to the state. The bill will also cut  $94 million dollars from Department of Health and Human Service, resulting in a cut in social health programs, children and family aid and community health programs.[8]  Currently in Las Vegas, cuts are being made within the social service areas which effect medical care from social services, homeless benefits and cuts to Medicaid.  I need a job, and if Obama can offer public work jobs, then I can be employed again. I’m thinking Obama have the sense of industry, similar to that of FDR, and Clinton, whereby the people of this great nation do not want a hand out. We want to work again.  The unemployment extension would be nice, but it only acts as a band-aid. Job stimulus is what I and others need more than ever at this point.  I can only hope that Obama will also include in his stimulus plan some type of educational/vocational training.

 

 

 

 

 

 

FOOTNOTES:

 

1.) William A. Niskanen. “Reaganomics“. The Concise Encyclopedia of Economics. Retrieved on 2007-05-22.

2.) Etebari, Mehrun (July 17, 2003). “Trickle-Down Economics: Four Reasons why it Just Doesn’t Work“. faireconomy.org. Retrieved on 2007-03-31.

 

3.) The Survivor by John F Harris, page 84

 CBS Interviews Former Treasury Secretary Paul O’Neill. Retrieved on 1 September 2008

4.) http://money.cnn.com/2003/11/25/news/economy/gdp/  

5.)Airline bail out By Jon Dougherty World NetDaily.com 2008

6.)Barack Obama backs plea for Henry Paulson to extend bailout to car industry

By: Suzy Jagger in New York  November 10, 2008

 

7.)Obama’s step 1: Economic stimulus plan By NEDRA PICKLER & TERENCE HUNT Associated Press  Philadelphia Daily News

 

8.) Washington Post, 2/7/05; Associated Press, 2/6/05; Center on Budget and Policy Priorities, 2/7/05; Families USA, 2/7/05] Press, 2/6/05; Center on Budget and Policy Priorities, 2/7/05; Families USA, 2/7/05

8.)National and State Unemployment Rates
Unemployment Rate figures obtained from the U.S. Department of Labor –
www.dol.gov

 

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