Obama has expressed the importance of our country coming together and making the effort to better the current financial and economic situation.  He called in state governors and city mayors, vowing to hold them accountable for every dollar they receive from the federal government.  He used his State of the Union address this past Tuesday to reiterate the importance of every individual moving forward; more importantly, he explained how his plan will work to help everyday Americans.

The message the White House has been sending this past month has been that today is the day that change has come.  Tuesday’s speech was no different.  We need to change our ways as people when it comes to spending, lending, and borrowing. More importantly, President Obama told congress that today was the day they have to stop putting off reform.  In order to better understand the situation, we have to realize how we got to this point.  Congress allowed banks to exercise past lending practices and to push bad loans Reform was put off.   Discussions about Healthcare and Educational reform was put off for the next year and for the next administration

As the leader of this next administration, Obama has given us access to a website, recovery.gov, as a place to go and follow exactly where every tax dollar is being spent.

The importance of credit in our economy has never been so visible.  Obama said if credit isn’t flowing, then the process of recovery we must go through twill not begin.  If people cannot get loans then they cannot buy homes or cars. Aspiring students will not be able to apply for student loans.  If credit is not freed, stores cannot stock their shelves and sales cannot be made.  If lending is not opened up, then businesses cannot make payroll and people get laid off.  So banks stop lending to individuals and each other and eventually credit dries up.

We need to put an end to this destructive cycle and restore confidence and lending.  President Obama has laid out a three part plan to do this.  The first part of the plan comes in the form of the new lending fund, the largest effort ever made to increase lending to the following people: auto loans for consumers, business loans for entrepreneurs, and education loans for students.  The second part of Obama’s plan is a housing program to help responsible home owners lower their monthly payments and refinance their mortgage.  The third part of the plan aims to restore money and confidence to the banking system.

From the top, this plan looks like an effort on all fronts to encourage lending, the true question is just how much will this cost us over time?

Obama and Geithner are now cracking down on the banks.  They are saying that in order for banks to receive more money from the bailout funds, they will have to cap their pay.  They will also be held accountable for where the money is being spent and used.

Okay, let’s back track.  What happened to the first round of funds that was distributed while the old administration was running the show?  Well, no one really knows.  As a result of the government not holding banks accountable, the funds ran out.  The public learned of these banks’ continued spending, along with the $18 billion in bonuses that these bank executives earned.

When consumers apply for a loan or a mortgage, their financial past is put under a microscope during the underwriting process.  Banks need to know details about the potential borrower’s income, any outstanding debt and financial track records.  If this is standard procedure, why aren’t banks subjected to these checks when they ask to borrow money from us??  Why can banks borrow money from public funds and not have to show where it is being used or spent?

Thankfully it looks like Obama and Geithner will not allow this lack of accountability to continue with the second round of funding.  With the first round of funding distributed,  I have not seen any evidence of credit markets opening back up.  So where exactly did the money go?  We may never know where the first round of funds were spent.  Moving forward, hopefully the public will see evidence of more transparency when it comes to detailing how the rest of the funds are being used.

After a series of hard negotiations, we are finally there-or are we?  Will the details of Obama’s stimulus  plan work the way this administration hopes?  We certainly hope so.  If not for me, then for my children, and my children’s children.  This mess is going to cost us in the long run either way, but this question remains: will the amount of money invested in this plan, and the goals it hopes to accomplish,  pull us out of this hole?

Most of the ideas that make up this plan will create jobs instantly/ The crucial question we must ask is whether or not the plan will have significant impact in the long run?  Again, I am optimistic.

Why am I so optimistic, you ask?  Let me give you an example.  The $50 billion that is set to be spent on energy programs focuses on efficiency and renewable energy.  This monetary investment in energy efficiency will create jobs, as it will require jobs that conduct  expanded research.  We will be taking a step toward  a better the future for all mankind as we strive for clean energy.  Actions like these contribute to my overall sense of optimism for the future.

Another aspect of the stimulus plan that brings a smile to my face is the $46 billion being invested in state relief for education.  Some of this money will be used to repair schools and to modernize their facilities and resources.  Again, the need for this action will bring about short term job creation.  Moreover, in both the short and long term, we are taking tangible steps towards bettering the educational environment for our children.  We will be able to provide them with the tools and resources they need to maximize their academic potential.  Giving students the best technology available to them will  ultimately better their future and the country’s future.

While Obama’s stimulus plan is a costly plan, the possible benefits America can reap as a result are too promising to dismiss.  While some of us will not  see first hand the effects of the plan, the changes it will bring about will impact all of our lives in some way.  The lawmakers behind the scenes need to carefully examine the way money is allocated to various parts of the plan.  They have to consider the short term objectives while simultaneously keeping an eye on how every action will affect us in the long term.  By no means is that an easy job for anyone-even an experienced senator.  I do not envy them, as the stakes of this plan involve an entire country’s present and future well-being.

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

1. Create and save 4 million jobs.
2. 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
3. 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.