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Saturday, February 14, 2009

The Stimulus: As Good As It Gets

"The American Recovery and Reinvestment Act of 2009" will be signed into law on Tuesday by President Obama. It looks like he plans to get out of Washington and travel to Denver... an area that indeed has been hit hard economically in recent times. The Denver area will see job growth from this Act almost immediately.

While many still question whether or not this government initiative is the right thing to do long term, let's highlight the positives of what will happen with this massive funding effort.

1. Upgrades to our Transportation Systems
‐ $27.5B for highway investments.
‐ $8.4B for public transportation.
‐ $1.5B for additional state and local governments for transportation.
‐ $1.3B for air transportation systems.
‐ $9.3B for rail transportation.

In the suburbs of Denver plans have long been in place to build out rail in all directions. Lack of funding has always hindered those efforts. Perhaps one of these days we'll understand why those in Europe prefer the rail to our single occupant cars and no doubt the public in suburban Denver will also.

2. Massive Energy Investments
- $4.5B to repair fed buildings and increase energy efficiency.
- $3.4B for Clean Fossil Fuel R&D.
- $11B for smart-electric grid and modernization related activities.
- $2B to advance vehicle battery systems.
- $6 billion in new loans for renewable energy projects such as wind or solar.

You may recall reading about the City of LA's shovel ready project, "Solar LA," the largest solar project undertaken by any single city in the world. Tuesday will mark good news for LA's mayor whose office has long been championing this massive energy project.

3. Unprecedented Funding for State and Local Government Budgets
-$53.6B for the State Fiscal Stabilization Fund
-$39.5B to local school districts using existing state funding formulas to:
+prevent school cutbacks,
+prevent teacher layoffs,
+modernize buildings
-$8.8 billion to states for highest priority needs such as public safety system upgrades.

This funding is great news for state legislatures grappling with severe budget gaps in fiscal 2009 and public safety officials struggling to meet the public's demand for better disaster continengcy plans and systems.

4. Broadband Internet Expansion
$7.2B will be spent to increase broadband access and usage in unserved and under-served areas of our country. Not only will this better position us for economic growth and innovation, but broadband service provider firms (who already have geographic coverage strategies ready to implement), will begin hiring on those expansion blueprints this week.

5. Tax breaks
- Most individuals will get a $400 tax credit, and most couples an $800 credit.
- Many students will get a $2,500 tuition tax credit.
- First-time home buyers may qualify for a tax credit of up to $8,000.
- People who receive Social Security will get a one-time payment of $250.
- In total, $212B will get passed onto individuals and small businesses.

6. And of course Jobs Creation (Directly and Indirectly)
The Congressional Budget Office predicts that the plan all told will create between 1 million and 3 million jobs. Any opposition to that if it works out?

So, the stimulus plan has now passed. On Tuesday the spending begins. And although economists will argue about its long term benefits to the US economy, it is highly likely that the vast majority of those pundits will be wrong.


  1. 2. Massive Energy Investments

    Glad to see the emphasis on this. We need to reduce fossil fuels and move more into sustainable -- not because it's the "right thing to do" but because economically, it's a huge boost to the USA. Jobs, independence and best of all, quit sending petrodollars to a bunch of people that hate the USA.

    The quicker we can get off of the oil fix, the better for the USA.

  2. Hi,
    Avoiding oil is best for all countries. Eco friendly.


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