Obama plans economic revival with $850 billion stimulus

Friday, Dec 19 – In his latest bid to revive the sinking US economy, Barrack Obama aims to place $850 billion stimulus financial plan before the Congress next year.

His bid comes on the wake of the US economy sinking into recession, massive growth of unemployment, and crumbling infrastructure in the country.

The amount which is around 6% of the $14 trillion US economy, may be the antidote to US economy further sinking into recession, believes the president-elect’s economic advisors.

Speaking on the condition of anonymity, a prominent advisor of the president-elect said the need of the hour is to reverse the trend of rising unemployment in the country. That being the background, it is not surprising that the president-elect aims to create around 2.5 million employment opportunities over the next couple of years.

“The plan basically aims at achieving exactly that objective. It exceeds initial estimates by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid.  It even surpasses the estimates made by leading economists and the International Monetary Fund” he said.

Obama’s plan does not confine itself to prevention of unemployment alone.  While the proposal is now in circulation in the congress, his advisers are working with the lawmakers crafting a package that aims at overall improvement of the crumbling infrastructure like roads and bridges in the country.

“The plan may also include state aid for unemployed and health care as well as incentives such as tax credits for promoting renewable energy production”, lawmakers say.

With the ever rising unemployment problem in the country, the estimates prepared by economists assessing the requirement to meet the challenge have also been rising. Kenneth Rogoff, Professor Harvard University and advisor to Republican Presidential Candidate John McCain and Nobel Prize winner Joseph Stiglitz estimated the requirements at a staggering $1 trillion.

The Global scenario is not much different from what Obama aims at. While the UBS AG estimates the global stimulus of 1.5% of GDP over the next year, the IMF has asked for at least 2% of GDP set out for the purpose.  The European Union Leaders are drawing up similar stimulus packages that would together worth for around 1.5% of the 27 nation economy. They would sum up at around 200 billion euros or $289 billion. Among the Asian countries China leads the way with a plan of around 4 trillion yuan or $585 billion stimulus.