With Barack Obama's stimulus plan working through Congress, there is a lot of negotiating going on. The plan that passed the House of Representatives cost $819 billion dollars. Millions, billions, and trillions: all these numbers can start to lose meaning.
As much as we would all like a free lunch, we know that there is no free lunch and ultimately you the taxpayer are going to have to pay for this. Let's estimate some number on this a few different ways:
$819 billion dollars for the House version.
303 million people in the US
That costs $2,700 for each man, woman and child
144 million employed Americans (excludes kids, retired unemployed)
That is $5,600 for each employed American.
10.6 million unemployed Americans (3Q08)
That is $77,200 for each unemployed America.
As you line up to pay for your share of the stimulus plan, remember that this is on top of the $700 billion dollar TARP bank bailout plan that cost each of you almost that amount just last fall. But more than the cost, will this be enough to jump start the economy? Will it come soon enough to help with the current recession? Will the economy naturally come out of a recession all by itself if the government does nothing? Is the cure worse than the condition? What do you think?
Kevin Kersten has worked as Stock and Options Analyst writing about and managing diverse positions in the market.
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Reader Comments (Page 1 of 1)
2-09-2009 @ 1:24PM
elaine5410 said...
The key word for jumpstarting this economy is UNDERWRITING. Banks, auto dealers, lenders, mortgage brokers, credit card cos, and all financial institutions all must be required to lend without underwriting issues of any kind, to allow all borrowers to be approved, especially those that have had foreclosure, job losses, bankruptcy, large debt, & any combination of those. This will not only boost the economy if people know they can get credit & loans, but will also create consumer confidence.
2-09-2009 @ 1:25PM
niini44 said...
Elaine, what a dreadful idea. More high risk loans? How can you expect the lenders to be on the hook for distributing money that people can't pay back? This is how the mortgage lenders got into hot water - approving people for mortgages for houses they can't afford, and having home owners not realize their own financial limitations.
2-06-2009 @ 5:43PM
william lindblad said...
Elaine, bad idea as that is just what brought us here.
The blog is about how much this will all cost and Kevin, you are only part right. You missed what is under the rug.
While the proposed changes in energy policy sound great, they are not coming for free. Expect that every user of electricity in the U.S. is going to see increases of 100 to 200% in their bills. Expect that when the battery manufacturing process for the new electric vehicles comes public that it is not going to make the eco lobby very happy. It is not going to be the promoted panacea as making these battery types also pollutes - big time.
Add at least another 1,000 to your estimate.