Barack Obama has been officially inaugurated as the 44th president of the United States, and now all eyes are on him.  It’s now his economy, his foreign policy, and his legacy as our next president.  Presidents are defined by the actions they take in the first year of their presidency, but Obama has promised to make changes starting in his first few weeks in the White House.  The economy will be one of the major issues on his mind, and we will take a look at the immediate effects his presidency may have on your financial life. 

A different philosophy

The previous economic stimulus package sought to put money in the hands on the American people with the hope that they would take that money and put it back into the economy.  It was given as an advance on a tax credit for 2009.  Obama has more of an all encompassing approach to stimulating the economy.  Here is text from his speech about his economic recovery plan: 

“That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years. It is not just another public works program. It’s a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That’s why we’ll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That’s why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services.”

America’s Infrastructure

Obama wants to invest a reportedly $750 to $800 billion dollars in America’s infrastructure such as better roads, bridges, and mass transit.  He believes that mandating a massive effort to improve our countries infrastructure will stimulate the economy putting people back to work.  Included in this is a plan to modernize our public and private buildings by mandating more energy efficient components to buildings and facilities.  It’s a government spending plan aimed at helping create more jobs for Americans.  This has been coined as the new and improved “New Deal” similar to former president Franklin Roosevelt’s “New Deal” back in the 1930s. 

America’s Healthcare and Education System

Obama’s plan calls for the modernization of our healthcare records that will create jobs and save money for health care providers. 

“To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized. This will cut waste, eliminate red tape, and reduce the need to repeat expensive medical tests.”

He also wants to modernize the education system by incorporating green energy into schools and improving technology. 

“To give our children the chance to live out their dreams in a world that’s never been more competitive, we will equip tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries. We’ll provide new computers, new technology, and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future.”

A Tax Credit For Americans

Obama’s final component is similar to the previous stimulus plan.  He will install a tax credit worth $500 for individuals and $1000 per couple.  The tax credit will be available to 95% of Americans, according to the Obama administration.  The tax credit will most likely be based on adjusted gross income and those that have earned income. 

My Thoughts About Stimulating The Economy

I think the Republicans got it wrong, and I think the Democrats are getting it wrong.  What Americans don’t realize is that we don’t have a conservative problem or a liberal problem, we have a personnel problem.  We have an overwhelming majority of senators and congressmen who love to spend money.  They think they can spend their way out of the economic downturn, but it won’t work.  The only thing that will work is letting the free economy correct itself by punishing those who made bad decisions with their money.  Unfortunately, it will also punish those that did nothing wrong in the form of people losing their jobs.  However, there is nothing wrong with a little adversity.  What matters is how you react to adversity.  Will you whine, complain, and not do anything to further your situation?  Or will you get angry, get motivated, and make yourself a better person during these hard economic times.  The only way to stimulate this economy is to cut taxes for all Americans, not just the middle class.  Cut taxes for corporations, and they will have more money to expand their business and create new jobs.  Put more money into the hands of the American people over the long term.  The government will not rescue this economy.  We the people, will rescue this economy.