Feb 12, 2009
Obama focused his first prime time speech since taking office on the $800 billion stimulus plan designed to jump start our economy. Listening to this speech was very important to me. I rushed home from work early to make sure I had enough time to get comfortable. Intently listening to this speech was my way of giving President Obama his chance to put his plans for the economy out on the table. After hearing his speech, I believe he did just that. He spoke of the state of our economy, how his plan would work, and where he ideally would like us to end up.
He put it simply by saying businesses cannot get credit. I see evidence of the inability for businesses to get credit every day on the internet. As a result, the majority of credit card websites are eliminating the promotion business credit cards from their sites. If businesses cannot get credit, they simply cannot operate. If businesses cannot operate, people will not get hired. If people do not get hired, their lack of stable income prevents money from being spent and saved.
This is where America is at right now. Furthermore, we are facing the worst housing problem we have ever seen. People are paying upside down on their mortgages, meaning they owe way more then there homes will ever be worth. As a result, they will never truly have the chance to own that home outright.
People are down. America is down. Obama outlined his plan as the government’s responsibility to “put demand back into the economy.” He declared that it is the private sector’s responsibility to loosen up credit, to correct their past mistakes, and to take the steps needed to resolve this mortgage issue.
He did not beat around the bush, telling Americans that our “party is over.” He said we can no longer go on excessively spending and living off of some one else’s dollar. Consumer spending has led to a decline in the savings rate. This cannot be sustained.
President Obama discussed the transparency that must characterize the second half of the banks bailout. He said the plan laid out by Timothy Geithner would ensure the second half of the $700 billion is spent properly.
So where will these plans take us? Where will we end up? The lack of accountability of the last administration this past fall left many doubts in my head that we will get through this crisis; however, Obama gave us a way to measure the success of his plan a year from now:
Measuring the Success of the Stimulus Plan
- Create and save 4 million jobs.
- Force credit markets to operate efficiently
- Successful businesses are unable to obtain credit. This has to change.
- Normalize the credit markets.The housing market is stabilized
- The rate of foreclosure has been stemmed.
- Housing value has been stabilized over time
I am optimistic. I will continue to follow up on Obama’s progress in future posts. This is the ultimate question I want answered:, is credit flowing to businesses and consumers?
To read Obama’s speech on the stimulus plan in full go to nytimes.com.
- Obama’s Housing Plan – Stopping the Foreclosure rate
- What does Obama’s State of the Union Mean for Me and for My Financial Situation?
- Is A Second Stimulus Package “Necessary”?
- Financial Reforms: What It Means to the Banking Industry
- Who is Obama’s Housing Plan Really Helping?
- Capitol Hill and the Financial Crisis: A Busy Week
- The Stimulus Plan Outlined: Will it Work the Way They hope?
- Stocks are up Again
- U.S. Unemployment – Stemming Job Losses without Second Stimulus
- Bernanke Needs to Assure Jittery Market