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The Economy Continues to Struggle

With 2009 setting up to be one of the most memorable years ever, the country embraced President-elect Barack Obama becoming the 44th Commander in Chief amid a whirlwind of economic problems facing the country.

There are countless concerns that are plaguing the country as a whole these days. The biggest factor to the state of the economy today comes from the utter chaos within the financial sector. Billions of dollars have been spent already by the government to lend aid to struggling firms such as Freddie Mac (FRE) and Fannie Mae (FNM).

With the intention to bolster consumer and investor confidence, along with alleviating homeowners fears of foreclosure, the move was well received but did little to stimulate the economy as a whole.

Stepping into a daunting environment, President Obama's main priority lays with revamping the nation's economy. With that, he has offered his plan to initiate an $825B stimulus package that will focus on creating or saving some three million jobs by investing in the country's infrastructure, becoming more "green" as a nation and cutting taxes.

Another personal goal of his administration is to reduce the country's ultra-dependency on foreign oil. President Obama went on to comment that the dependence on oil "funds both sides of our struggle against terrorism, stifles innovation and sets back our ability to compete and those threats are compounded by the long term threat of climate change."

Nevertheless, where exactly will President Obama begin his revival efforts? With the country losing more than 2.6 million jobs last year, manufacturing companies slipping to their lowest levels in more than 28 years, and a current ratio of one out of every ten homeowners receiving a foreclosure notice, the recession has taken the country to levels not seen in decades.

In the President's first public address, this past Saturday, Obama cited that, "Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future." He went on to add, "In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse."

As part of the proposed package, the President expects to spend nearly 75% of the allocated funds within the first 18 months of his administration. With tax cuts for the middle class included, the White House will work closely with Congress in ensuring that the package will meet the 75% goal set forth by the President.

Within his outlined agenda, President Obama has vowed to increase the country's renewable energy generating capacity by twice the current production over the next three years. Efforts here will provide enough energy to power some six million homes. On top of that, he plans to infuse a smarter, better and bigger energy grid that will more efficiently transmit energy to our nation's homes.

Additionally, Obama is looking to modernize 75% of all federal buildings that, in the long run, could save taxpayers some $2B a year in lowered federal energy costs. Furthermore, the new administration is looking to implement the Clean Energy Finance Initiative that will loan some $100B to the private sector to ease restrictions on renewable energy investors over the next three years.

Along with that, the largest school project initiative will also be invoked, which is aimed at upgrading some 10,000 schools nationwide while improving the learning atmosphere of nearly 5 million children. Looking ahead to the future of our nation's children, President Obama is looking to fund the depleted Pell Grant, while increasing the overall maximum award by $500. Along with increasing the quality of preschools and fellowship programs, the plan will call for an education tax cut of $2,500 for those incoming college freshmen that didn't previously qualify for any tax cuts.

The last project of Obama's proposal relates to the administration's efforts to improve the nation's roadways, bridges and mass transit systems. Not since the implementation of the U.S. Highway system in the 1950s has a President enacted such measures. Moreover, the plan calls for an upgrade in security at more than 90 major ports around the country, which will lead to improved homeland security, an increase in international commerce and the creation of new jobs.

Tackling the problem of the country's healthcare system, Obama looks to lower overall costs for consumers, while increasing the overall scope of the coverage as a whole. In his efforts, adopting an IT system to update the current healthcare system, could in turn save billions of dollars within the industry, reduce medical errors along with improving the quality of healthcare provided.

So where does this leave us? President Obama's initiative, the American Recovery and Reinvestment Plan, is designed to implement the necessary steps the country needs to prosper in the future as a nation as a whole. By tackling issues within our economic markets and the unemployment crisis, his plan looks to lay the foundation of success for the nation to become more competitive on a global stage heading into the next decade.

- by BetterTrades Financial Analysts