Finance Globe

U.S. financial and economic topics from several finance writers.
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Obama Says Plan Could Save or Create up to 4 Million Jobs

In his weekly radio and YouTube address, President-elect Barack Obama reiterated the importance of moving quickly to stem the rising unemployment rate.

He said, "It’s not too late to change course – but only if we take immediate and dramatic action. Our first job is to put people back to work and get our economy working again. This is an extraordinary challenge, which is working – even before I take office – with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will call for major investments to revive our economy, create jobs, and lay a solid foundation for future growth."

Obama said that according to a report released by two of his economic advisors, Dr. Christina Romer and Dr. Jared Berntein, the plan "will likely save or create three to four million jobs." This estimate has moved up from two million jobs and then three million jobs over the past few weeks.

Also up is the percentage of private sector jobs to be saved or created, originally estimated to be 80%. Today Obama said that 90% of the jobs will be in the private sector, with the other 10% going towards saving jobs for teachers, police officers, firefighters and other important public service jobs.

Obama's advisors report that the projections are based on "a package just slightly over the $775 billion currently under discusion." They also remind us, because final legislation for the package has not yet been approved by Congress, that estimates are based on a hypothetical package and "are subject to significant margins of error."

Obama said that nearly half a million of the jobs will be created over the next few years through investing in clean energy. He said that improving health care through the computerization of patient medical records, and improving the quality of education by updating public schools will each create "hundreds of thousands of jobs".

"We’ll put nearly 400,000 people to work by repairing our infrastructure – our crumbling roads, bridges and schools," Obama said. And we’ll build the new infrastructure we need to succeed in this new century, investing in science and technology, and laying down miles of new broadband lines so that businesses across our nation can compete with their counterparts around the world."

Obama's advisors report that the government's spending on the proposed package will increase the nation's the gross domestic product (GDP) by 3.7%. GDP is the measure of goods and services produced by a nation, and is held by many to be an important measure of a country's economic strength.

The need to move swiftly is obvious to the millions of Americans who've already lost their job or who fear losing their job. In these uncertain times, very few have true job security. The Department of Labor reported yesterday that the unemployment rate was 7.2% for December 2008 and that 3.6 million jobs have been lost in the U.S. since the start of the recession in December 2007.

If we don't get some kind of economic rescue package, the analysis estimates that we could lose another three to four million jobs over the next few years to bring the unemployment rate close to 9%.

But from the numbers the Obama team came up with, the American Recovery and Reinvestment Plan isn't going to solve the nation's current problems - it will merely keep the problems from getting immediately worse. They predicted that the unemployment rate by the third quarter of 2010 will be around 7% - not much different than it is right now.

And it will take time to put the plan into action and actually create the jobs the nation so desperately needs. The report predicts that "the jobs created by spending on infrastructure, education, health, and energy to be concentrated in 2010 and 2011."

Even upon Congress passing legislation to stabilize the nation's economy, it looks like 2009 will continue to be a rough year for America's families.

Obama said, "Now, given the magnitude of the challenges we face, none of this will come easy. Recovery won’t happen overnight, and it’s likely that things will get worse before they get better."

Obama's plan also extends unemployment insurance and health care coverage for the long-term unemployed, a $1000 tax cut for 95% of working families, and state assistance to avoid harmful cut-backs in vital public services.


Source:
change.gov
Loan Delinquencies on the Rise
Brace For a Difficult 2009
 

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Saturday, 24 August 2019

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