Can the Obama Plan Help things? Couldn't Hurt...

Today, we will find out some of the details of the President-Elect's stimulus plan. By tomorrow, we should know more, but for now, let's see what we know will be in there, and what we think needs to be in place for a proper recovery.

1. What do we need? As a country, we have a laundry list of issues to be addressed. But in the short term here, we need at least the following issues to be addressed, before the economy goes further towards the dreaded "D-word" (Depression).

a. Tax relief for middle class--Payroll tax relief? Income Tax credits? Capital Gains tax cut? Tax credits for renewable energy, or hybrid/electric car purchases? You bet. Any and all of the above, as far as I am concerned.

b. Infrastructure efforts--This includes broadband, and Internet infrastructure, Fixing potholes, Bridges, Water treatment plants, Tunnels and Highways. I thought Mike Huckabee had an interesting idea. Add a lane to I-95. Maine to Florida. Cut traffic congestion. Build an Acela track to really get across the megalopolis from Boston to Washington DC in a competitive time frame and at a competitive cost.

c. Mortgage relief--I don't know if the Fed can do much more, but Mortgage rates at 4-4.5% would be a reward to those who have been prudent with their money. Time to reward the fiscally prudent with an opportunity to refinance. Time to save whomever you can save from defaulting on loans with a 100 basis point reduction in rates. Time to incent investors to buy inventory with cheap rates. Clearing out the mortgage mess can start to give the banks the room they need to get busy investing in our economy again. Just keep an eye on the predatory loans this time around, eh?

d. Credit/Lending to pick up--step c is a good start. But hopefully, TARP can clean up some of the toxicity in the market place currently. Perhaps the stronger banks will be able to digest some of the weaker competition, and find that there are a lot of good investment opportunities out there, and not as much competition for the next buck because a lot of the weaker banks are now gone. The question will be, "how fast can this attrition happen?"

e. Health Care improvements--stemming the tide of increasing co-pays and premiums would be great. Despite John McCain's rhetoric on the campaign trail, I have a family of four, my health plan is $12,000, and I don't have a gold-plated anything. I pay a co-pay of $30/doctor visit, and up front costs on any medication. My coverage ain't great, and I haven't had any plastic surgery. Even holding the line on such coverage would be a start. Getting some of the state plans funded like the Massachusetts plan set in motion by Mitt Romney, wouldn't be a bad idea. In the end, I am for a single payer, but I am open to suggestion. Anything is better than watching my health care costs rise at 2x the rate of inflation every year.

f. Affordable Education--like point e, why does this precipitous increase continue to happen? Additionally, my state and local taxes go up each year, primarily for education costs, and I don't see a marked increase in the services to my children. How can college continue to outpace inflation, and still be affordable for ANYONE in 5-10 more years? Something has to change.

g. Get off the oil standard--Oil is going back up. Don't believe me? Check Bloomberg, or Yahoo! for yourself. It's already back up $10/barrel from its recent lows. Time to stop fooling ourselves. Let's get the solar panels up, the windmills going, the Nuclear plans building, etc. We also need enough of a tax incentive to BUY hybrids, electric plug-ins, or to put some of these solar panels up on our roofs. I said it in point a, and I am reiterating it here.

2. What do we know that the plan offers? So far, not a lot. But some of these points are addressed:

a. Tax cuts--A $500/individual, or $1000/family tax credit to offset payroll taxes has been mentioned. This is a start. Also, a $3000/new worker tax credit for small businesses is a good idea. If the banks will allow borrowing at cheap rates, the opportunity to start a new business could be as good this year as it has ever been.

b. Infrastructure projects--this concept of "shovel-ready" projects being funded is a good start. Funding SCHIP and Medicare would be a good way to get State and Local governments out of the red, and back to funding their own projects. That's another plus.

So far, that's about all I have seen. The education, energy, health care, and lending legislation will hopefully be fleshed out in the details. Let's hope that our leaders have enough sense to recognize that now is the time to pursue all of this--when the country is ready to take its medicine.

Don't let Mitch McConnell scare the pants off you, when he says that the money will be spent on water slides and Mob Museums. This is coming from a guy whose party oversaw the largest deficit creation in the history of the country, and funded bridges to nowhere. In my mind, there is little credibility left in this man, when he suggests that NOW his party has seen the light, and they will be the stalwarts in protecting the American people from the out-of-control spending that the Democrats want to pass. It might have had some credibility in the past, or from some other source. But I am afraid I can't abide by stalling out the stimulus package so that someone like Mitch McConnell can take a hatchet to the details for the upcoming months.

So, in the end, this stimulus package will be enormous ($600-800B), and should at least start to address what ails us as a nation. I say, let's give it a try. We have a few weeks to study the details. Let me know if there are any pieces of the legislation that should be axed. I will put it up here.