(snip)"Obama's 'emergency' economic plan
By MIKE ALLEN | 8/1/08 9:38 AM EST
Sen. Barack Obama (D-Ill.) on Friday announced an “Emergency Economic Plan” that would give families a stimulus check of $1,000 each, funded in part by what his presidential campaign calls “windfall profits from Big Oil.”
Details are in this six-page policy paper
The first part of Obama’s plan is an emergency energy rebate ($500 to individual workers, $1,000 to families) as soon as this fall.
“This rebate will be enough to offset the increased cost of gas for a working family over the next four months,” Obama said. “Or, if you live in a state where it gets very cold in the winter, it will be enough to cover the entire increase in your heating bills. Or you could use the rebate for any of your other bills or even to pay down debt
Separately, Obama’s plan includes a $50 billion stimulus package that his campaign claims would save more than 1 million jobs.
Half of the money would go to state governments, which are facing big budget shortfalls, and half would be used for national infrastructure, including replenishing the Highway Trust Fund, rebuilding roads and bridges, and repairing schools.
Obama announced his plan 27 minutes after a Labor Department report showed unemployment hit a four-year high of 5.7 percent in July — the highest rate since March 2004, when it was 5.8 percent.
“We need to do more,” Obama said in a statement. “That’s why today I’m announcing a two-part emergency plan to help struggling families make ends meet and get our economy back on track.
McCain reacted to the surprisingly dour jobs report with a two-paragraph statement: "Across this country, Americans are hurting and today's job numbers are just the latest reminder of the economic challenges we face. ... Unlike Sen. Obama, I do not believe that raising taxes is the answer to our economic problems. There is no surer way to force jobs overseas than to raise taxes on businesses.”
Obama announced his plan for a windfall profits tax on oil companies on June 9 in Raleigh, N.C., as he launched a two-week economic tour after clinching the Democratic nomination.
Friday’s proposal says Obama “is proposing to offset the cost of his emergency energy rebates over the next five years by enacting a windfall profits tax on big oil companies.” "(snip)
from
the obvious questions are
- who actually winds up paying for this emergency economic plan. With only an 8% profit margin already, the impact of increasing taxes on oil companies will undoubtedly be higher prices for US gasoline / fuel oil / jet fuel
- who actually benefits from the $500 or $1000 proposed checks ? Well obviously only those who are eligible to receive checks will have the potential of benefitting ... and Obama's as yet unannounced cutoff income would likely be those earning under $100,000 per year. One must then determine (after the fact) whether the higher prices they pay for gasoline / fuel oil / jet fuel (either directly or indirectly) are greater than or less than the amount of the stimulus check. Of course if the additional tax on oil companies and resulting higher prices for gasoline / fuel oil / jet fuel remains in effect in future years, while no additional stimulus checks are issued, the only beneficiary will be the gov't who is collecting these additional tax revenues.
- per the link to Obama's full proposal, the other $50 billion appears to be targeted at increased social welfare benefits in the area of energy subsidies as well as health care, education etc. Of course, these benefits are only available to those who qualify via their 'low' income. Thus it would appear that the only ongoing beneficiaries of Obama's plan would be low income social welfare benefit recipients who would pay higher prices for gasoline, but who would have their future fuel oil / utility bills subsidized on an ongoing basis in addition to receiving the stimulus check
- also from Obama's full proposal, the other $50 billion will also be directed towards maintained / increased public sector employment levels via state gov'ts and highway dept's. It would appear that Obama's claim of 'preserving' jobs actually boils down to losing private sector jobs (which are funded by profits) and replacing them with an equal number of public sector jobs (which are funded by increased future taxes or increased future deficits).
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