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Obama unveils $210 billion economic stimulus plan

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Democrat presidential candidate Sen. Barack Obama, D-Illinois, today unveiled a new $210 billion federal spending plan that he says would create jobs in construction and environmental services.

The Obama proposal would invest money over 10 years in two programs, the largest of which would be a $150 billion effort to create 5 million "green collar" jobs to develop more-environmentally friendly energy sources.

The remaining $60 billion would fund a National Infrastructure Reinvestment Bank to rebuild the nation's highways, bridges, airports and other public facilities. Obama said the construction fund would create nearly 2 million jobs, many of them in construction directly - - a sector hard-hit by the housing sector's correction - - the nation's most severe housing slump in more than 20 years.

Rival Democratic Sen. Hillary Clinton, D-New York, called Obama's effort unoriginal. Neera Tanden, Clinton's policy director, said Obama was offering ideas Clinton proposed months ago. "Voters may ask themselves that if Senator Obama cannot produce his own ideas on the campaign trail, how will he solve new problems as president?" Tanden said in a memo e-mailed to reporters, The Associated Press reported.

Furthermore, the Republican National Committee, which seeks to portray Obama as a tax-and-spend liberal, included Obama's plan on its 'Obama Spend-O-Meter.' The Republicans assert that Obama's announced programs would add $850 billion in federal spending over four years, including health care, education, national service and foreign aid programs, among others. The RNC's web site did not break down the asserted total by year, but economist Steve Affinito told BloggingStocks Wednesday, assuming equal, annual appropriations of $212.5 billion, the total would not be an unreasonable nor an unwarranted outlay, from an economic standpoint, in his interpretation.

"I don't know where the RNC obtained its $850 billion total, but for the sake of argument, even it was $220 billion per year, that's fairly modest, given the services it includes, including universal health insurance," Affinito said. "Also, given the current state of the economy we may find we may need another $150-$200 billion economic stimulus this year, just to keep the economy growing. So in that regard, Sen. Obama's proposal is insinc with the times and a net positive for the U.S. economy."

( President Bush today signed a $170 billion fiscal stimulus package that provides tax rebates and business investment incentives.)

Obama wasn't too pleased arguing "this agenda is paid for," according to The Associated Press . Obama said the money for his spending proposals will come from ending the Iraq War, cutting tax breaks for corporations, taxing carbon pollution and raising taxes on high income earners.

Economic Analysis: Upon initial review, both programs appear timely and prudent. An infrastructure / construction initiative should have been passed by the U.S. Congress a decade ago - - the nation's infrastructure [bridges, roads, mass transit systems, schools, hospitals, parks] is in that poor of a condition. Sen. Obama's plan represents only a modest start on that rebuilding effort. The energy program also has merit, given the need to develop cleaner energy sources in the decade ahead. [Note: More on Obama's federal government revenue plan, later.]

Political Analysis: After months of rhetoric, Obama is finally starting to talk about program specifics, which suggests the Obama campaign is increasingly confident it can hold its own against a Clinton strength - - namely, detailed program discussion/analysis and policy implementation. Further, the contours of Obama's ideology are coming into focus: Obama's campaign is increasingly striking populist, liberal activist-government cords. It's a philosophy that views government as an agent of good - -what political scientists and economists call the positive state - - and one that simultaneously enhances conditions for sustainable private sector economic growth.

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Last updated: November 06, 2009: 12:35 PM

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