Sun editorial:

Some optimism, at last

Stimulus bill is the best chance yet for America to pull out of its economic crisis

Wednesday, Feb. 18, 2009 | 2:09 a.m.

Since early 2008 economic news in this country has gone from bad to disastrous — millions of Americans have been laid off, 38 banks have failed and home foreclosures have devastated thousands of families in every state.

The Bush administration’s tax cuts for wealthy Americans amid record increases in government spending — largely in Iraq — contributed to the economy’s free fall.

Adding to the problem was the administration’s belated, one-dimensional rescue plan — a bailout for banks plagued by miscalculations, sudden changes in direction and lack of oversight.

What the country really needed was a multidimensional plan that included direct help for the American people, through money invested in state programs, education, middle-class and low-income tax credits, new and upgraded infrastructure, energy independence and health care.

President Barack Obama delivered that plan Tuesday in Denver, where he signed the $787 billion American Recovery and Reinvestment Act. During a speech before he signed the bill, Obama made special mention of a few leaders, including Senate Majority Leader Harry Reid, D-Nev., who were instrumental in getting this sweeping stimulus bill through Congress quickly. Because layoffs are still escalating, that success was critical.

With the exception of three senators, Republicans — perhaps hewing to the failed policies of the previous administration — voted no on the bill. With the country in one of its worst-ever economic crises, Obama had worked hard for a more bipartisan vote.

Recalcitrant Republicans, however, were the bill’s only disappointment. Tuesday was a day, finally, for some good news. Obama’s words before signing the bill were welcome indeed for state governors, schools, business owners and millions of laid-off people who can now hope that a job opportunity will soon present itself.

By putting Americans to work on new and needed projects, everything from rebuilding highways, bridges and dams to manufacturing components for renewable energy industries, the bill aims to stimulate local and state economies in the short term. By investing in other areas, including health care, education, research and electric transmission lines, the bill aims to prepare the country for the future.

This bill does not promise overnight recovery, but it does offer the most optimistic outlook since the recession began.

Discussion: 5 comments so far…

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By jfnance32

Feb. 18, 2009

6:40 a.m.

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The stock market has no faith in this "stimulus" and TARP plans or in the Obama administration.

It has been in decline for over 30 days now.

It will continue to decline.

An expert that predicted the drop last year is predicting the DOW to fall below 6,000 this year.

I do not believe the tax credit giveaway of $1.10 a week is not going to help anybody but McDonalds.

It will take years for the infrastructure spending to be spent.

Japan and FDR tried that anyway and it not work.

The "stimulus" is a jar full of candy that does not have an overall unified strategy to it. It is a shotgun approach where each pellet is tiny compared to the size of the US economy.

All it does is add on tons of debt that will crowd out private investment when all those Federal bonds flood the market.

The Congressional Budget Office (CBO) says in the long run this bill hurts the economy.

This is one of the worst bills ever passed.

Obama and Democrats are doing a lousy job.
By Future2012

Feb. 18, 2009

7:11 a.m.

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Obama had a snarky smash down 2-5-2009 in Williamsburg. Obama exaggerated that unless Republicans instantaneously supported the Democratic social engineering borrowing and spending Stimulus II bill the country cannot avoid an economic catastrophe and ensuing chaos.

I repeat Obama said the country cannot avoid an economic catastrophe and ensuing chaos.

Given the poor CBO jobs scoring and long term negative 10 year out GDP forecast, Obama's stimulus need to rely purely on a "psychological lift to consumer confidence" from the package to sell itself that the economy will not end up stuck in a prolonged deflationary trap)

Vice President Joseph Biden told House Democrats that "there's still a 30 percent chance we'll get it wrong." Over a trillion dollars and only a 70% chance of success.

Obama signed the bill on 2-17-2009, and the Dow Jones tanked 300 points down to 7552.

The White House leaked that since only a third of the bill is stimulus, that Stimulus III will be needed.

Now Harry Reid has come home to Nevada on 2-17-2009 and declared that "this is not going to be a Great Depression" I think the economy is going to be better". Obama is betting on the getting better""

The LV Sun has jumped on the bandwagon saying "".it does offer the most optimistic outlook since the recession began."

No wonder people need to continue to personally deleverage and stop all discretionary spending.

Consumer confidence is dropping with Obama's snarky fear mongering campaign of ranting against the economy and businesses and saying that our economy will not recover without an immediate borrow and spend package and pay cuts for business owners.

Low confidence by everybody who needs to deleverage will continue to slow or stop spending with this Obama fear mongering of the economy.

No hope or reason here for expanded discretionary spending.
By Houstonjac

Feb. 18, 2009

7:55 a.m.

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I clearly hope this new welfare legislation will lift many people who it is intended to help.

For you to say that the Bush tax cuts were only helpful to wealthy Americans is wrong. They helped many of us who are not wealthy also. "Tax cuts" is just a dirty phrase to liberal spenders. No one in there right mind believes that a government who taxes its people more is doing a good job. Marginal rates should be reduced at all levels of income. Making nonreimbursed medical expenses 100% deductible would be major relief for many middle income earners who see 71/2% of their adjusted gross income deducted from their nonreimbursed medical expenses before the first dollar of these expenses can be taken as an itemized deduction. That should be a tax reduction that even most liberals could support. Why hasn't this been remedied?

The negative reaction of the stock market to the so called "stimulus plan" is curious. The investor public does not view this plan as being one that will lift the economy. Why not I wonder?

This initial injection is only the beginning of the most horrendous liberal welfare spending onslaught that the world has ever seen.

By the way, 7 of the past 8 years were good economic years under Bush. Consumer spending was solid,employment was high and stable, inflation was under control and consumer confidence remained high. All this in spite of 9/11 impacts, two wars and Katrina. Pretty spectacular performance. It was the housing implosion that led to the present crisis, as the toxic effects of an unregulated lending and buying spree fanned the fires of an overheated market.

A major player in this ultimate collapse was Barney Frank, who refused the sounds of warnings that the NGEs Fannie Mae and Freddie Mac needed to be subject to more regulation. When Frank was confronted in 2003 in Congress by then Secretary of Treasury Snow regarding the need to clamp down on these NGEs, Frank said he could see no problem, and blocked further regulation.

This editorial is a biased piece of jounalism that really does no justice to the perspective forming and leading up to the current situation.
By getalife

Feb. 18, 2009

7:56 a.m.

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This bill is crap. It won't affect anyone until the year 2011.

Let Obama walk on somebody else's water, this is a joke.
By boftx

Feb. 18, 2009

11:39 a.m.

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This turn of events was clearly forseeable when we became a net-importer in the early 70's. As long as we continue to buy the bulk of our manufactured goods from overseas (and by extension export jobs) we can NEVER recover from this downturn. Any "stimulus" that is based on borrowed money (again from overseas) is doomed not only to failure but to making conditions worse.

Tarrifs failed in 1930, and harmed the world economy at large, mainly because we were a net-exporter at the time. Today just the opposite is true and we need to protect our jobs and stop the hemoraging of cash overseas.

This so-called stimulus bill not only fails to address the root cause, but will actually make it even worse in the long-run.