〈 The President heard first hand from the people of Elkhart how dire their economic situation is. As we saw during the campaign, the conventional wisdom in Washington does not always reflect what people in America are thinking and experiencing. They are very clear that the Recovery and Reinvestment Plan is needed now.
〈 President Obama’s recovery plan will put Americans back to work doing the work America needs, creating or saving 3-4 million jobs over the next two years while transforming the economy for the 21st century.
〈 The Recovery Plan addresses long-neglected needs in energy, education, healthcare and infrastructure that are critical to laying the foundation for a robust and 21st century economy: investing in renewable energy to help us move toward energy independence; modernizing our schools; computerizing medical records to save costs and lives; and repairing our infrastructure. Specifically, the plan will:
o Modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions while reducing our dependence on foreign oil. The plan will also double renewable energy generating capacity over three years.
o Make the immediate investments necessary to ensure all of America’s medical records are computerized within five years, reducing medical errors and saving billions in health care costs.
o Equip thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries.
o Expand broadband across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world.
o Enact the largest investment in America’s crumbling roads, bridges, waterways and transit systems since the creation of the national highway system.
o Provide immediate tax relief for 95 percent of American workers.
〈 If we don't move swiftly to put the Economic Recovery Plan in motion, our economic crisis could become a national catastrophe. Millions of Americans will lose their jobs, their homes, and their health care.
〈 Independent analyses by Macroeconomic Advisers and Moody’s Inc. have confirmed that the Recovery Plan will create or save 3-4 million jobs over the next two years. The jobs created will be in a range of industries from clean energy to health care, with over 90% in the private sector.
〈 The most important number for President Obama is the number of jobs the plan will create. He will only sign a bill that:
o Meets his test of creating or saving more than 3 million jobs.
o Has unprecedented accountability and transparency, including allowing Americans to track the money on the website Recovery.gov
Putting the Jobs Numbers in Perspective
Last month, the economy lost 598,000 jobs. That’s like losing every job in the state of Maine (employment of 612,000 in December 2008).
In the past 2 months, the economy lost 1.2 million jobs. That’s like losing every job in Pittsburgh (1.1m in Dec ’08) or the entire Cleveland metropolitan area (1.1m in Dec ’08).
Ø Or Idaho (629k) and New Hampshire (647k)
Ø Or West Virginia (757k) and Montana (443k)
Ø Or Delaware (432k), New Mexico (840k), and Rhode Island (469k)
In the past 3 months, the economy has lost 1.8 million jobs. That’s like losing every job in Connecticut (1.7m) or South Carolina (1.9m).
In the past 4 months, the economy has lost 2.2 million jobs. That’s like losing every job in Silicon Valley and the entire San Francisco area (2.0m) or all of Louisiana (2.0m).
What happens to the U.S. economy in the absence of stimulus?
Administration forecast:
- Unemployment rate will peak at 9.6%
- The output gap will be over $1 trillion in each of 2009, 2010, and 2011. Thus, the cumulative gap is over $3 trillion.
- The economy will lose another 5 million jobs, for a total job loss of 7.6million
Mark Zandi, economy.com (1/21/09 forecast):
- Unemployment rate will peak at 11.1%
- Payroll employment will decline another 6.4 million, for a total job loss of 9million.
CBO:
- Unemployment rate will peak at 9.2%
- The GDP gap will be $1.0 trillion in 2009; $1.1 trillion in 2010; and $0.8trillion in 2011, for a three-year cumulative gap of $2.9 trillion.
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