Stimulus package creates uncertainty

It will “set our economy on a firmer foundation,” President Barack Obama said Tuesday while signing the $787  billion American Recovery and Reinvestment Act into law. 

We all wish those words were true and that could be the end of the story.

However, here’s the million—wait, make that billion—dollar question most everyone can’t get out of their heads: will the stimulus package really work?

With the economy in its current state, there is no question that something needs to be done.

Opponents of the stimulus package say it will run the nation’s debt sky-high—yet these same people usually cite making tax cuts from former President George W. Bush’s days a permanent solution.

While it is difficult to believe tax cuts will save the economy—for example, when former President Ronald Reagan signed tax cuts into law during his presidency, the national debt more than tripled—I also find it impossible to think about the future, and how college students will be stuck paying for everything.

Even before any new spending, the federal deficit is expected to top $1.2 trillion this year. Just to give an idea of how big that number really is, Andrew Dilnot, an economist at Oxford University and author of “The Numbers Game” divided government spending by the number of citizens and the number of weeks in a year.

With this formula, a $700 billion bailout equaled $45 per week for each American man, woman and child.

The book goes a step further and says per day, it would equal approximately $6.

Would everyone be happy paying $6 per day for a healthy financial system?

“There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short term,” Obama said when he signed the act. “But equally certain are the consequences of doing too little or nothing at all.”

This is what makes the recovery act such a hot topic—many people agree something needs to be done to stimulate the economy, but these same people also have their doubts about a bill centered around $787 billion being the appropriate action to take.

Even with this much money being spent, it will all mean nothing if it is not spent wisely.

To avoid the failures already experienced by the first financial sector bailout, money could be reserved for the states or communities who face the most drastic situation. Along the same line, should money not be given to those individuals who cannot afford to save it?

In a real stimulus, the economy will only be boosted if the money is being spent instead of saved.

While one of Obama’s priorities with the stimulus plan is speed in creating and keeping jobs, change in the system will only happen when Washington puts their spending priorities and processes in line—no money without reform.

With the history of previous years still fresh in our minds, it seems difficult to believe the recovery act will be a complete success.

No one can predict the future, but if we somehow manage to pull ourselves out of the recession within the next two years, skeptics of the recovery act will most likely say it would have ended regardless of the $787 billion. However, if the economy troubles linger, the opposite side will probably say the package prevented a bigger disaster from happening.

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