So whenever you hear a Republican politician or tea partier say that the stimulus failed point them to this article where conservative think tank AEI admitted that the stimulus boosted the economy by 4%.

The real economy also responded to the massive stimulus but remained heavily dependent on it. In the United States, growth during the second half of 2009 probably averaged about 3 percent. Absent temporary fiscal stimulus and inventory rebuilding, which taken together added about 4 percentage points to U.S. growth, the economy would have contracted at about a 1 percent annual rate during the second half of 2009.

President Obama plans to announce the details of how he plans to spur job growth through infrastructure, home energy efficiency, and tax breaks for small businesses.  “Having finally moved into positive territory when it comes to economic growth, our biggest challenge now is making sure that job growth matches up with economic growth,” Obama told reporters at the White House after his job summit last week.  Today the President will give details to the American people about how he plans to do just that.  We can expect the President’s initiatives to help increase growth within small businesses in an effort to create a need for such businesses to hire new staff, to increase spend to modernize roads, railways, bridges and tunnels, airports and seaports and install a rebates program for consumers who retrofit their homes to become more energy efficient, according to a White House official.

WASHINGTON — Senate negotiators reached a tentative deal to extend a tax credit for first-time home buyers, but its passage remains uncertain.

The agreement would extend the existing credit for first-time home buyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all home buyers who have been in their current residence for a consecutive five-year period in the past eight years.

The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real-estate market a bigger boost while preventing real-estate investors from benefiting. 

See remainder of story here

Good news for the American economy! 

• American’s net worth grew by $2 trillion in the second quarter of this year for the first time since 2007 that we have seen such growth.
• Home prices are up.  Real estate values rose 1.8 percent for the first time since 2006

WASHINGTON – Americans’ wealth rose this spring for the first time in nearly two years, with stocks and home values gaining as the recession faded.

Still, household net worth remains about 19 percent below its peak in the third quarter of 2007, before the recession began.

The Federal Reserve said net worth grew by $2 trillion to $53.1 trillion in the April-to-June quarter. Net worth, or the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards, rose nearly 4 percent from the first quarter, the Fed said.  See full article here.

This is a good thing.  The White House will propose national fuel standards today for all vehicles sold in the United States and its territories.  The proposal orders automakers to increase fuel economy by 35.5 miles per gallon by 2016.  The original plan was 10 years but the Obama administration has pushed the date up by four years.  Automakers have been against toughening fuel efficiency standards forever but the the Obama administration has brought them on board thus increases the chance of success significantly.  This is a a non political issue and affects all Americans in their pocketbook especially after the exorbitant gas prices last summer.  This proposal will also save 1.8 billion gallons of oil and may serve to implement a compromise on cap and trade legislation which will limit greenhouse emissions.  So by 2016 all cars sold in the United States will have to get an average of 39.5 miles per gallon and all trucks 30 miles per gallon.  The President made fuel efficiency standards and clean energy a key component of his domestic policy agenda during his campaign and though there still is a long tough road to passage all this writer can say is……another campaign promise to be fulfilled.

Americans have grown more optimistic about the economy and the direction of the country in the 11 weeks since President Obama was inaugurated, suggesting that he is enjoying some success in his critical task of rebuilding the nation’s confidence, according to the latest New York Times/CBS News poll.

These sometimes turbulent weeks — marked by new initiatives by Mr. Obama, attacks by Republicans and more than a few missteps by the White House — do not appear to have hurt the president. Americans said they approved of Mr. Obama’s handling of the economy, foreign policy, Iraq and Afghanistan; fully two-thirds said they approved of his overall job performance. 

By contrast, just 31 percent of respondents said they had a favorable view of the Republican Party, the lowest in the 25 years the question has been asked in New York Times/CBS News polls.

It is not unusual for new presidents to enjoy a period of public support. Still, the durability of Mr. Obama’s support contrasts with that of some of his predecessors at the same point in their terms. It is also striking at a time when anxiety has gripped households across the country and Mr. Obama has alternately sought to rally Americans’ spirits and warn against economic collapse as he seeks Congressional support for his programs.   See full article here

The GOP is really lost in the wilderness at this point.  Not only does their “budget” spend more than the President’s budget but when they were comparing their budget to what they thought was the current administration’s numbers, it turns out they they were using the numbers of the Bush administration which made their conclusion end with a skyrocketing deficit.  So what does TAKE TWO of the House GOP “budget” recommend? Let see, they want to cease all non-military discretionary spending for five years. In other words, bye, bye stimulus, infrastructure building, educational advancements, healthcare reform.   Hello, more tax cuts for the wealthy, additional tax breaks for big oil companies, and higher taxes for the middle class. The House GOP “budget” also proposes cutting funds allocated for food stamps to low-income Americans who are the ones in most need of help during this economic downturn.  

It appears that the GOP really are the Marie Antoinettes of politics given that they seem to relish the sentiment most often erroneously attributed to the former Queen of France, “let them eat cake.”  The embattled party also proposes cutting education and medicare spending. In other words, lets continue to keep the American populace lagging behind other countries in pre-college education advancement. As for medicare, the GOP wants to privatize it…you know like they wanted to privatize social security?  Think about where we would be now had we listened to he Republican Party when they proposed that we take all the Social Security funds and invest them in the stock market. The GOP budget plan also maintains and gives additional tax cuts to an even smaller group of the wealthiest Americans.  They want to cut the corporate tax rate from 35 percent to 25 percent. You know, give the Wall Street fellows a bit more reason to celebrate. In addition, they want to suspend the capital gains tax for two years.  But propose a subtantial increase personal income taxes for the middle class, those earning $50,000 to $100,000 per year. It appears that the GOP really is tone death. As a matter of fact, Congressman Eric Cantor of Virginia says that Democrats are “overreacting to this economic crisis.” Apparently unemployment claims reaching an all time 26-year high is a figment of our imagination. I also assume that the fact that Cantor’s wife’s (Diane Cantor) employer, New York Private Bank and Trust, receiving $250,000 in TARP funds keeps his family sitting pretty through these difficult economic times.

It is very easy for someone to say that a plan will not work and criticize it excessively.  It is much more difficult to offer sound alternative solutions in the light of such criticism.  Every time I hear the President speak I walk away feeling completely confident of our eventual recovery.  So I pull up my bootstraps and head out to do my part by using a small amount of purchasing power to help in the cause.  Just as I’m about to head for the door, I hear someone from the GOP screaming ‘oh my goodness…..the sky is falling….the sky is falling.’  So what do I do instead….I go out and buy an umbrella. 

The GOP has been all over the Sunday shows and the political spectrum shouting that the budget proposed by President Obama spends too much and will impose insurmountable debt on future generations.  Such an argument confuses the immediate priorities.  Who amongst us would forgo an opportunity to provide our starving child with food knowing that it will result in a larger credit card bill next month even if there was a possibility that the grocer may not accept credit and you may walk away empty handed.  In times of emergency all reasonably viable opportunities must be pursued.  Besides, give a child a fish and he/she will eat for a day. Teach a child to fish and he/she will eat for a lifetime. It is a much better proposition to sacrifice the funds now and clean up the ocean so that future generations can eat for a lifetime.

Unfortunately, the GOP have failed miserably at offering any plausible alternatives to the president’s budget that have not already been tried during the eight years of the Bush administration.  In spite of the fact that the GOP has all of a sudden got fiscal religion, lets revisit history for a moment in terms of its fiscal track record.  The budget was balanced for the first time in 30 years under President Bill Clinton.  That means that the four Republican presidents preceding Clinton (Reagan, Bush 41, Nixon, Ford) and the single democratic president (Carter) could not balance the budget.  Lets also remember that President Bush and a republican controlled Congress entered office with a 86.4 billion dollar surplus.  President Bush, with the help of a GOP controlled Congress six out of his eight years in office, left the presidency and the country with a staggering $638 billion dollar deficit.  One wonders if on the Titanic the GOP were the ones bailing water into the ship. Needless to say, the Republican party has absolutely no credibility when it comes to debt left to future generations or fiscal discipline in general.

The President proposes that the best way to bring down our deficit is to have a budget that leads to broad economic growth. It also makes sense that the president’s budget is inseparable from our economic recovery because it lays the necessary foundation for a secure and lasting prosperity.  The administration plans to create a new foundation for the economy by creating a new health care system, new energy technology, and achieving great progress in education so that it will enable us to become a much stronger competitor in the global economy.  There is an enormous need to counter the incredible drop in demand currently plaguing the nation and pull us out of this crisis.  The only sector with money to do so is the government.  That means that the government is the liquidity source of last resort right now. It must spend to stimulate demand and prevent us from sinking into a depression. As a matter of fact, the Congressional Budget Office (CBO), a nonpartisan body, says that the adoption of the Reinvestment and Recovery Act will help to end the recession by fall of this year. 

We must make the necessary investments in education, health care, and renewable energy infrastructure now in order to equip future generations for future and sustained prosperity.  So instead of just putting a band-aid on the broken economy this administration has opted to confront it, operate, and heal it.  The biggest drain on future funds is health care.  More specifically, Medicare and Medicaid.  Therefore, investing in an information technology system to make the health care industry more efficient will also contribute significantly to decreasing our deficit. Now that all the relevant players in the health care industry now recognize that the industry must be reformed including the majority of the GOP, twelve years later, but at least they are on board now, now in the time to do it.  We must face the fact that we as a people must make a tectonic shift in how we move throughout or day to day lives.  During this challenging time it will be inconvenient and we will have to make sacrifices now in order to secure a prosperous future.

Other obstructionist arguments offered by the GOP.

 The GOP argues that the small businesses will be hurt most by a tax increase on Americans making over $250,000 a year.

According to Politifact, a small business would have to ”make” $250,000 in net profit after deducting all his expenses (employees pay, supplies, and other legitimate business expenses) to be subject to the tax increase.  The nonpartisan Tax Policy Center says that only two percent of small businesses will be subject to the tax increase.  Which means that 98 percent will more than likely receive a tax cut.

Charities will lose by a decrease in the deductions allowed for charitable giving by the wealthy.  There will be a cap on such deductions for those earning $250,000 or more a year.

The best way to encourage and enable charitable giving is to have a flourishing economy. When the economy is booming people are much more charitable. In addition, a significant amount of charitable giving comes from low income people through religious institutions etc.

Requires a Cap and Trade or energy tax on all Americans.  

The cap and trade plan is designed to reduce green house emissions and address climate change in addition to investing in necessary infrastructure building. Further, building such infrastructure will enable us to decrease our dependence on foreign oil.  The plan will also move toward providing us with alternative sources of energy and provide millions of green jobs in the process.  Not to mention that it will help us to become an energy producing rather than an energy consuming economy.  This part of the president’s budget is a necessary investment in our infrastructure, by way of updating the electric grid among other things, for the jobs of the future.  Our outdated electricity grid is costing the U.S. over $100 billion dollars a year.  It wastes twice as much energy as it did thirty years ago.  We need to update and modernize our energy grid.  The GOP has criticized this part of the budget by referring to it as an energy tax. Why you ask? Because the GOP is significantly dependent on oil company money and it is not in the interest of the oil industry for the U.S. to become less oil dependent.  Why you ask?  Because the cap and trade plan will result in consumers using less energy (driving less)which cuts into oil industry profits.

Repealing tax credits to the oil and gas industry that may result in putting the industry at a competitive disadvantage.

Exxon Mobil shatters U.S. records in January 2009 by reporting profits of 45.2 billion for 2008.   Nuff said.

Where is the GOP’s budget you ask? They don’t have one.