Teshyya Burrus
English 112
Michele Marits
Essay 2
The Recovery Plan
“We need an American Recovery and Reinvestment
Plan that not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term. And this
plan must be designed in a new way—we can’t just fall into the old Washington habit of throwing money at the problem.
We must make strategic investments that will serve as a down payment on our long-term economic future…” (Obama,
2009)
Those were the words that our President Barak Hussein Obama spoke during one
of his weekly address before his legendary inauguration. From the sound of that speech he gave America really had something
to look forward to for when Obama became president. The country’s present economic status is in horrible shape and this
Recovery Plan will really help to change that. Okay, Obama has come up with a way to get our nation out of this economic crisis,
but the question is, how did we get ourselves into this? Unfortunately, there wasn’t just one situation that got the
nation into this mess. A combination of situations got the nation into this mess, including; the war in Iraq, inflation, and
bank bail outs.
Nearly six years ago, before we
enter Iraqi territory, the estimated financial cost for the war done by the top budget officials was roughly $50 billion.
But, the White House’s chief economic adviser, Lawrence Lindsay, estimated the cost to be much greater than that. Lindsay’s
estimate was between $100 and $200 billion. (Bumiller, 2002) His guesstimated figure was close, but no cigar. So far we have
spent roughly over $500 billion on the war, and that number is increasing with every passing day. And that money that has
been spent and that is continuing to be spent is taxpayer’s money. Not only is this war costing taxpayer money, it is
also costing American lives. According to Common
Dreams the money could have been used for much more important things. Things such as; eliminating extreme poverty around the world (cost $135 billion
in the first year, rising to $195 billion by 2015), achieving universal literacy (cost $5 billion a year.), immunizing every child in the world against deadly diseases (cost $1.3 billion a year.),
and ensuring that developing countries have enough money
to fight the AIDS epidemic (cost $15 billion per year.). With all of that added
up it still has a way to go until it reaches what the nation has spent thus far. Merely those things that could help the world
would only cost roughly 285 billion dollars compared to the 500 billion dollars plus that has already been spent.
The higher that inflation get to less that people are able to
purchase for the same amount of money that they was to use. Inflation is the economies
condition as the prices for goods and services is rising, and, subsequently, purchasing power is falling over a period of
time. The increase
in government fees and taxes has lead to this inflation. The cost of business and the cost of products have begun to increase,
and when that began to happen, people’s income began to decrease. Many well known companies have had to close because
they can no longer cope with the increase in the government fees and taxes. Companies that have been forced to close include
K-Mart and Circuit City. Inevitably, this is leading to the increased unemployment rate throughout the nation. The nation’s
unemployment rate has gone from 4.7% in 2007 to 7.6% today, according to Associated Content. And that is one of the highest unemployment percentages that the nation has seen in a long time. The Recovery and
Reinvestment Plan that President Obama has established is supposed to help lower the rising unemployment numbers by providing
long term jobs. This Recovery and Reinvestment Plan is supposed to create 3 million new jobs.
Another major cause of the nation’s current financial situation
is our banking systems. The housing industry was really booming a few years ago. There were a lot of schemes out that made
it easy for people to get house and become home owners. Many people started buying houses which caused house pricing to decline,
but once a bump in the road was hit, everything sky rocketed. Many homeowners were unable to pay the now higher monthly payments,
which put negative equity into their homes. With the negative equity in the homes many banks began to fail. There has been
$198,824,513,000 paid out to bail out banks since October of 2008 and of that only $442,310,000 has been paid back. (CNNMoney) The banks that got bailed out included: Wells Fargo, CitiGroup, Sun Trust Bank, Capital
One Financial and so many more. The largest bank failure in history was the collapse of WaMu (Washington Mutual). WaMu went
from having stock going for over $30 to being sold for close to $2.00. They were bought out for about $2 billion by JP Morgan
Chase Bank. (Zarroli)
The reason why America is in this financial mess is due to all of these
reasons: funding money for the unpopular war in Iraq, inflation and this becoming trend of bailing out banks. Unless steps
are taken to stop these things, the United States of America will be in for a rude awakening.
Works Cited
Bailed-Out Banks. Retrieved April 16, 2009, from CNNMoney.com
Web site: http://money.cnn.com/news/specials/storysupplement/bankbailout
Bumiller, Elisabeth (2002, December, 31). Threats and Responses:
The Cost; White House Cuts Estimate of Cost of War with Iraq. The New York Times, Retrieved April 22, 2009, from http://www.nytimes.com/2002/12/31/us/threats-responses-cost-white-house-cuts-estimate-cost-war-with-iraq.html
Kielburger, Craig and Marc. "How the Iraq War's $2 Trillion
Cost to US Could Have Been Spent." CommonDreams.org. 01 21 2008. 23 Mar 2009 http://www.commondreams.org/archive/2008/01/21/6507.
Obama, Barack (2009, January, 03). American Recovery and
Reinvestment. Change.gov Office of the President Elect, 1, Video Retrieved March 23, 2009, from http://change.gov/newsroom/entry/american_recovery_and_reinvestment
Reynolds, Charles. "Unemployment in America Today: What Does
it Mean?" Associated Content. 12 17 2008. 23 Mar 2009 http://www.associatedcontent.com/article/490099/unemployment_in_america_today_what.html?cat=3
Zarroli, Jim (2008, September, 09). Washington Mutual Collapses.
NPR, Retrieved April 11, 2009, from http://www.npr.org/templates/story/story.php?storyId=95105112
