With many banks repaying their borrowed TARP funds, President Obama is now pushing for a new use with those funds: a new jobs stimulus. Yesterday, the President presented his plan to the Brookings Institution, a non- profit public policy organization.
According to the Wall Street Journal, this new program will come in two parts:
“The first would top $100 billion and would extend unemployment insurance, temporary food-stamp payment increases and subsidies for health-care purchases by the unemployed. That would likely be attached to a spending bill in coming weeks. The second, a jobs bill estimated at about $70 billion, would contain many of Mr. Obama's initiatives and likely wouldn't reach his desk until early next year.”
Some of the specific programs named in the speech were $50 billion devoted to infrastructure, additional lending to small businesses by the Treasury, offering assistance to state governments, tax breaks to small business, tax rebates for individuals who make their homes more energy efficient, and completely getting rid of capital gains taxes for small business investments.
Democrats are pushing for this bill to fill in the gaps of the watered down first stimulus. In an attempt to negotiate with the Republican minority, Democrats agreed to devote only about 10 percent, or $80 billion, of the first $787 billion stimulus to infrastructure spending. This is Presidents Obama’s chance to push forward the program he wanted with the newfound money. Republicans, on the other hand, say that this new stimulus will end the same way the first one did: in failure. They propose to use the $200 billion from TARP repayments to reduce the deficit.
With only about 20% of the first stimulus spent, some are saying that the President is jumping the gun with this program. To add to this critique, Republicans and some moderate Democrats are doubtful that more government spending will stimulate the economy. But if a new bill is passed, will it do just that? Some say yes, some are doubtful, but only time will tell.
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what will happen to the united states if china and all the countries and all investors the world over shun the dollar. It will not be a pretty sight. Interest rates would rise and the federal reserve would be forced to buy bonds from the treasury to fund the government and pay interest on all of the governments bills notes and bonds. When the buyers for united states debt obligations disappears the whole system will come crashing down. This is the type of thing that peter shiff has been warning everyone about when the ability of the united states to pay its debts becomes clearly in doubt all the buyers for united states debt securities disappears overnight.
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