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Spending Plan Raises Wealth Of Questions

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The Tampa Tribune

Published: February 2, 2009

Does Washington really need to do this?

Many economists from across the ideological spectrum say yes, although an increasingly vocal group of free-market thinkers says no.

Those backing the stimulus plan hope it counters the economic contraction and mounting job losses with a huge spike in federal spending.

The money would include refundable tax credits - $500 for most individuals, $1,000 for most working couples.

Opponents think government spending largely will supplant private investment, minimizing the effect of the former on the overall economy. Meanwhile, they say, the changes will delay difficult adjustments in the economy.

Where would the money come from?

It would be borrowed, ballooning the federal deficit, which already is projected to top $1 trillion.

It is clear that there is no other way to pay for a stimulus plan. And without it, there is a good chance the economy could continue to shrink - or, at best, remain flat - for years.

How quickly would the money be spent?

President Barack Obama has set a goal for 75 percent of the money to be spent within 18 months of signing the bill into law. The Congressional Budget Office analysis of the $819 billion House version of the bill passed last week found that about two-thirds of the money would be spent in the first 18 months. The Senate takes up the bill today.

Where would the jobs be?

The Obama administration says the vast majority - up to 90 percent of the jobs - would be created in the private sector. The jobs would be heavily weighted to construction and manufacturing, which together would account for almost one-third of the new or saved jobs, according to the administration's analysis.

The administration estimates that more than 600,000 of the jobs saved or created under the stimulus plan would be in retail, and 500,000 would be in leisure and hospitality industries.

The Washington Post

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