By Katie Kieffer
Photo credit: http://tinyurl.com/yh8wv69
How do you stimulate yourself to stay positive in this economy? When your friends are losing their jobs and the world seems to be closing in on you at the speed of light, it can be challenging to stay optimistic.
President Obama has tried to stimulate our economy to recover quickly through his economic stimulus package. Clearly, he recognizes that the economy is in a down-cycle. I am concerned, however, about the long-term ramifications of his actions, particularly for young people like me.
Young people of my generation are typically optimistic. 66 percent of my peers, ages 18-40, voted for President Obama in 2008. Young people thought that President Obama would be able to bring the necessary change to the United States to make it a more prosperous place. Change can be good – if it makes things better for the long-haul.
USA Today’s article, “Obama poll: Scores higher on personal traits, lower on issues,” discusses a survey of Americans’ views on the president’s healthcare proposals. Young professionals seem concerned that the president’s idea of change is too expensive and expands the powers of government too far: According to, ‘Adam Davis, 32, a software engineer from Turnersville, N.J., who was called in the survey. “No doubt things need to change,” he says, “but for me personally it’s too much, too fast.”’
Economists who have studied this recession are now pointing out that the $787 billion dollar stimulus that Congress passed in January didn’t work. A recent Wall Street Journal article stated that, “the data available so far tell us that the government transfers and rebates have not stimulated consumption at all, and that the resilience of the private sector following the fall 2008 panic—not the fiscal stimulus package program—deserves the lion’s share of the credit for the impressive growth improvement from the first and second quarter of 2009.”
Chief economic strategist for Miller Tabak, Dan Greenhaus, pointed out to FOXBusiness that the case will be made that we may be entering a “double-dip recession” and that it’s highly debatable whether the GDP boost is due to real growth or just to the stimulus. Other economists increasingly concur with this outlook, reports Bloomberg.com.
America is about jobs. Historically, people have come to America to secure jobs. We are currently facing $11.8 trillion dollars in national debt that grows by about $3.8 billion every day. Just because we’ve seen a short term improvement in GDP, we still haven’t seen a recovery in the labor markets. The unemployment rate is still climbing dangerously to 10%.
Consumer spending accounts for 70 percent of GDP, so until employers are able to start hiring again, our economy won’t recover in the long term. If this recession persists in the labor markets, and, if new jobs aren’t created through the private sector, the opportunities for my generation are going to dry up.
If our country isn’t achieving real growth and the government is simply redistributing money from one source to another, we have not achieved a long-term solution. Our generation needs to find a long-term solution for economic growth and recovery.
I think that one way we can all try to stay optimistic is by embracing this recession as a time to innovate and do things better and differently than ever before. By taking action and making things happen, we’ll be able to channel our worries into positive, productive energy. We can encourage entrepreneurial and innovative ideas and enterprises that will create jobs and help us compete with the global marketplace.
We can’t expect the government to come up with a creative solution for the economy. Clearly, they’ve tried to stimulate the economy and jobs are still on a downward spiral. Now, it’s up to ordinary citizens – especially young leaders – to step forward with creative ideas and solutions.
What are your ideas?
A response to “aguy” on the Public Option. Not to be too demeaning, but are you completely delusional lol? Social Security was supposed to be “budget neutral” too. http://www.whitehouse.gov/omb/rewrite/budget/fy2008/outlook.html (Scroll about 2/5′s down the page) Is it….? The Public Option will NEVER be budget neutral, it will be the cheapest option because it’s going to be subsidized by our tax dollars and real insurance companies are going to be unable to compete. And it’s going to be run poorly and inefficiently, and once again, be funded by OUR tax dollars. People complain about insurance rates, why do you think they’re so high? Theres a reason…. It costs A LOT of money to cover healthcare costs. The government isnt going to magically figure out a way for people to stop going to the doctor…the government is going to pay out the same amount as the companies do now, they’re just going to be able to charge less you money because they’re going to be subsidized by our taxes.
Also, what ever gave you the idea that I’m in favor of Social Security? It’s not in the constitution, and the government shouldnt be running MY retirement plan. I can do it myself, thank you. As it is, I’m going to pay in for the next 40 years, and probably never see a dime, because Social Security is going to be broke by the time I retire. The highway system is in the constitution by the way, as is the Postal Service. I was using the Postal Service as an example of how inefficient the government is, perhaps it wasnt the wisest example. And I’m sorry, but saying the Air Force isnt in the constitution is kind of ridiculous. I realize you’re trying to say that we cant hold the Constitution to be too literal, but the USAF is clearly an extension of the armed forces. Social Security/Medicare/Obamacare on the other hand is not an extension of anything in the Constitution.
Lastly, you’re right, a lot of it was banker greed. They can collapse and go bankrupt then. I didnt see any of their massive profits when they were making billions, why should I bail them out with billions?
PS I just re-read some of what you wrote. “competition will be encouraged by a government-run insurance plan”. This is exactly what shouldnt be happening. What you said right after is a great idea though, deregulate and allow insurance to be sold across state lines and nationwide by all insurance companies. We dont need a government plan to “encourage competition”. We need exactly what you said, removal of the barriers keeping private insurance companies out of certain markets. There, how easy of a fix was that, we just figured out a way too fix this whole problem. The more companies that are allowed into a market, the cheaper it will get as they compete with each other, and it wont take a cent of tax-payer money creating a government subsidized insurance company to do it.
Yes, thank you, I CAN choose my own healthcare, and I CAN buy my own house, and I CAN save money for my own retirement.*
One more thing about this and I’ll stop commenting every five seconds: The public option is a “choice” precisely because it’s NOT taxpayer funded. It’s budget neutral: meaning, it needs to support itself to survive. This point seems to get confused pretty easily when people talk about this.
The PO will operate exactly like any normal private insurance company on the marketplace, to the extent that one can pay — OUT OF POCKET — for insurance. That is what will fund the PO, NOT taxpayer money (moderate Dem senators required this provision, and it’s a good one) ….
If it’s a better deal than your local insurance, great! If not, buy some from the local insurance company! That’s choice and competition. What it isn’t is a giant slot machine, pumping out free insurance to anyone and everyone. That would be wasteful. This brings down costs and encourages competition in markets dominated by monopolies.
* These are all things, however, that are majorly affected by tax breaks, so your choice is somewhat “nudged” toward one decision or another.
Hold up there… I was talking about the ’03 tax cuts, not the ones in ’01. I would definitely have supported the ’01 tax cuts (even though they were geared at the top one percent (people who save their money, rather than spend it) because we definitely needed some recovery after 9/11. Did we need it in 03? Nope. That’s when we needed to temper growth, rather than encourage it like a run-a-way freight train, running up the deficit needlessly. So: if economy in the toilet? Stimulus/tax cutting are good. Obama’s stimulus had a ton of tax cuts for exactly this purpose. Bush’s tax cuts in 2003 were a political ploy that bankrupted America to win an election. I’d find some data to support this, but you did that for me.
About your Medicare point, I wouldn’t go jumping to the Heritage Institute for unbiased info — I’d go check out RAND or the Kaiser Family Foundation….
Yes, thank you, I CAN choose my own healthcare, and I CAN buy my own house, and I CAN save money for my own retirement.
….at such sites, you can learn all about how you “CAN” still buy your health care from your favorite private health plan. In areas where one health insurance company controls the market, competition will be encouraged by a government-run insurance plan, or by removing the anti-trust exemption for health insurance companies, to get more of them in local markets (hopefully). You may have this choice where you are, but many states around the country (largely in states without prohibitions against for-profit health insurance companies, like MN has) do not enjoy such freedom.
I won’t deny “double-dip” recession fears aren’t unfounded. The stimulus bill was not as large as economists had wanted, so this stimulus may not have been enough to really get us out of the whole. Moderate Dems and moderate Repubs stripped out money because of their political tentativeness, not because of what the economy needed. That’s too bad, but at least what passed helped get us out of free fall and back on track..
I hope you realize that the government helped create the housing bubble by mandating that banks give out loans to people who didn’t have the means to make the mortgage payments.
Lenders created new sub-prime mortgages so they could then sell them on the secondary market. No one was “made” to sell things — it was very, very lucrative for everyone: you get poor people in a house and have them pay low interest rates, the lenders get to sell tons of these loans to the secondary trading markets, and these secondary market banks get a .00001 percent stake in a bajillion properties. it made sense to them: property values always went up!
Too bad the secondary market couldn’t price or understand the new financial products and compounded the risk w/ packaging them up, and too bad the credit rating agencies were (er, are) totally incompetent … once the economy start tanking, people lost their jobs and couldn’t pay their “sub-prime” loans.
Getting into a contract is a big deal, and sub prime borrowers paid a huge price. I’m just not sure if Apple were selling exploding iPods with payment plans, I’d automatically say “buyer beware! you bought that exploding iPod!” — the financial sector should either know what it’s doing, or be prevented from doing things in its self interest which messes up the larger market. That’s where the gov regulation can help…
powers are clearly defined in Section 8 of the Constitution, Universal Healthcare for all is not included.
The air force isn’t in the Constitution, but it’s still allowed. Social Security, Medicare, Bill of Rights applying to states, etc……..
The Postal Service is broke, Amtrak has been losing money for decades …..
Amtrak isn’t a business, it’s a service. How about the money-losing highway system? Or those money-losing national parks? Or money-losing VA Hospitals? Or the US Military? Things lose money but can still be valuable and money-making in other ways (rail in particular can help labor be more mobile to get to better jobs they’re more productive in, making the larger economy more efficient and help local economies grow). Lots of government programs are wasteful. Lots are not. But just discrediting government altogether (or saying it’s always the answer) is not correct because it varies with the policy problem…
Bush’s contribution (tax cuts), was done for growth — which never materialized.
Actually, they did. http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000 You (“Aguy”) claim that the labor market lags behind the economy. As you can see from the chart, the unemployment rate increased during Bush’s first 2.5 years, from 1/01 to 6/03. The unemployment rate then steadily decreased. Might this be growth from the Bush tax cuts, hmm, looks like they materialized after all….
Did you know that the Medicare’s long-term structural deficit in present-value dollars is $38 trillion? http://www.heritage.org/Research/HealthCare/wm2507.cfm Maybe we should use the savings the White House has proposed, (a puny $0.31 trillion dollars over 10 years along with a one-time savings of $0.3 trillion) and reduce the long-term deficit of Medicare. Or maybe the government should stop playing Mommy and Daddy to everyone. Yes, thank you, I CAN choose my own healthcare, and I CAN buy my own house, and I CAN save money for my own retirement.
Obama’s actions were done for economic recovery — which has been seen as of late
Since you didn’t link anything where economists were optimistic about the economic recovery I’m inclined to just say no, you’re wrong, instead, I’ll link an article about a double-dip recession. http://money.cnn.com/2009/08/18/markets/thebuzz/index.htm?postversion=2009081812 Part of what it says, with a nice chart along the side, is that the falling dollar could account for some of the increase in the stock market. It also points out that Oil is up 50%, Soybeans are up 75% and Sugar is up 65%, so I wouldn’t get too ecstatic about the Dow being up just yet.
We could sure use some financial regulation to make sure this doesn’t happen again, though.
I hope you realize that the government helped create the housing bubble by mandating that banks give out loans to people who didn’t have the means to make the mortgage payments. Maybe more regulation would be good, I don’t claim to understand exactly why this all happened, but in my mind, the less government involvement there is in the free market, the better off we’ll be.
The government is us — we should be helping it do things that make the country successful.
The government’s job isn’t to hold our hands. It’s job and powers are clearly defined in Section 8 of the Constitution, Universal Healthcare for all is not included. And besides, when has the government every made efficient use of money? The Postal Service is broke, Amtrak has been losing money for decades, and my roommate who works for Metro Transit has painful story after painful story about what an insane amount of money they waste on projects day in and day out. The government has no incentive to be efficient, if they’re in the red, Congress just votes up the Debt Limit, http://www.whitehouse.gov/omb/budget/fy2010/assets/hist07z3.xls whereas a private company goes bankrupt and the owners lose everything. So why do people think more government involvement is a good thing….?
I am concerned, however, about the long-term ramifications of his actions, particularly for young people like me.
His actions have contributed less to the deficit than Bush II, though. And Bush’s contribution (tax cuts), was done for growth — which never materialized. Obama’s actions were done for economic recovery — which has been seen as of late (despite your WSJ opinion page link, most objective economists believe it’s worked.) On top of that, things like health care reform seek to stop increases in Medicare, which will lower the deficit.
Just because we’ve seen a short term improvement in GDP, we still haven’t seen a recovery in the labor markets.
According to my Econ 101 textbook, job numbers always lag behind the economy. In fact, the lag time for the labor market following a downturn has doubled with each recession since 1973 — after the last recession it took nearly three years for things to get back to normal.
We can’t expect the government to come up with a creative solution for the economy.
Then why be involved in government, as you suggest? The government is us — we should be helping it do things that make the country successful. Considering we’re doing better than we were during the 08 election season — GDP up, slowing job losses, Dow back to its previous high — I’d say we’re doing pretty darn well. We could sure use some financial regulation to make sure this doesn’t happen again, though.