News Release

Obama, Stimulus and Entitlements


An economist with the Center for Economic and Policy Research, Rosnick said today: “While short on specific numbers, President-elect Obama helped prepare the country for a large, but much-needed stimulus package to be negotiated by Congress over the next few weeks. Speedy and large should be our watchwords, as the recession continues to deepen. We applaud Obama’s drive for improved energy infrastructure and provision of funding for cash-strapped states. Obama should insist on a separate package for state and local governments if Congress delays funding the entire package. It is vitally important that the falloff in government revenues — a consequence of the bursting of the housing bubble and subsequent crash in the stock market — not impede the passage of a large stimulus.”

For background, see CEPR director Dean Baker’s blog.

Wolff, an instructor at the Graduate Program in International Affairs at the New School University, is a frequent contributor to Huffington Post and Asia Times. He said today: “It is not President-elect Obama’s fault that he is inheriting such a mess. That said, the time has come and gone from him to hang up the feel-good campaign talks about hope, inclusion, responsibility and start the actually difficult and essential job of proposing and enacting legislation with Congress. This means a dangerous transition away from super hero all things to all people darling and into the fray of actually governing. We need more than hope. We can’t just resurrect the old good times. Those good times were the disease. The present pain is just a symptom. We need to seriously and systematically restructure our economy. A nice, bright, moderate guy giving good speeches that talk about hard work, responsibility and Wall Street wrongdoers is not a solution. A friendlier more competent dose of Bush-lite is insufficient to stem the bleeding.

“There are so many unexplained aspects and congressional horse trades still to come that discussing details is very hard. We can’t wisely comment on details we have not yet really gotten. The focuses on education, energy, employment, tax cuts make sense. How? In what proportions? By whose definition?

“Today seems again to suggest that Obama continues to do what works — for him. That is to give smart, cogent and very balanced-sounding campaign talks. His persona, election and promise of monies have helped to lift spirits. As folks discuss how ‘shovel ready’ the infrastructure spending is, people are going to start wondering what Washington is shoveling if they don’t see real struggles over real change, real soon.”
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Gupta is editor of The Indypendent newspaper in New York City focusing on economics. He wrote the recent piece “Obamanomics: Why the Stimulus Plan Will Not Revive the Economy.”

He said today: “Even before his inauguration, President-elect Barack Obama is taking aim at two programs — Social Security and Medicare — that are the foundation of a secure life for tens of millions of retired Americans.

“In his much-anticipated speech today on the economy and his historic economic stimulus plan, Obama said ‘as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending.’

“As part of the agenda to ‘eliminate unwise and unnecessary spending,’ Obama is targeting the healthcare and income of older Americans. The previous day, Obama told reporters: ‘We expect that discussion around entitlements will be a part, a central part of those plans.’

“With the economy in a devastating decline, talking about reducing the income of millions of Americans is hardly the way to ensure a speedy recovery. And if the Obama administration wanted to do something about government expenditures on healthcare programs like Medicare and Medicaid, it would support proposals for single-payer healthcare that would eliminate the vast majority of bureaucratic and administrative costs and save businesses and working Americans money while ensuring everyone receives full healthcare coverage.

“As many suspect, there is another agenda at work. While hundreds of billions have been lavished on failed Wall Street financial firms and more will be spent to bail out other failing business sectors, average Americans will have to pick up the tab even though they pay dedicated taxes for Social Security and Medicare benefits.

“We only have one president at a time, the Obama transition team is fond of saying. It appears they think there can only ever be one economic policy for today and tomorrow, and that’s neoliberalism. Targeting Social Security and other entitlements is nothing more than a cynical ploy to raid working Americans’ future for the benefit of the super-rich and corporations that got us into this mess and profited from it.”

For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167