Unemployment rates in the United States hit a four-year high in July, and inflation rates have risen 1.32% since January 2008.  In fact, economists believe inflation is the greatest threat to the US economy and worry the energy-driven rise in prices will become permanent.  Senator Obama’s response to the dire economic outlook is an “Emergency Economic Plan” that would take from rich oil companies experiencing record profits and give back to the American people in the form of stimulus checks, as well as invest $50 billion in states and infrastructure.

Obama’s Emergency Economic Plan

Unlike McCain, who can’t remember the price of gas or how many houses he owns, Obama recognizes working Americans are struggling.  In response to the current economic crisis, Obama’s Emergency Economic Plan offers both long and short term solutions.  In a move reminiscent of Robin Hood, Obama would take from rich oil companies and give to the American people. The emergency plan also includes a $50 billion stimulus package designed to save 1 million jobs.  Specifically, Obama’s plan includes:

1. Forcing big oil companies to take a reasonable share of their record breaking windfall profits and use it to help struggling families with direct relief worth $500 for an individual and $1,000 for a married couple. The relief would be delivered as quickly as possible to help families cope with the rising price of gasoline, food and other necessities. The rebates would be fully paid for with five years of a windfall profits tax on record oil company profits. This relief would be a down payment on Obama’s long-term plan to provide middle-class families with at least $1000 per year in permanent tax relief.
2. $50 billion in immediate measures to turn our economy around and help prevent more than 1 million Americans from losing their jobs:

• $25 billion in a State Growth Fund to prevent state and local cuts in health, education and housing assistance or counterproductive increases in property taxes, tolls or fees. The fund will also ensure sufficient funding for home heating and weatherization assistance as we move into the fall and winter months.
• $25 billion in a Jobs and Growth Fund to replenish the highway trust fund; prevent cutbacks in road and bridge maintenance and fund new, fast-tracked projects to repair schools – all to save more than 1 million jobs in danger of being cut.

McCain’s Response

McCain would rather help Big Oil than working Americans. Proposing corporate tax cuts and increased drilling won’t feed families.  McCain stated:

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.

Raising taxes on Big Oil when they are making record profits only seems fair in these tight times.  Obama is not proposing taxing struggling businesses or working individuals.  When wealth is unevenly distributed, I believe it is the right of government to intervene on behalf of working citizens. Remember, these are “windfall” profits Obama proposes taxing; however, what happens to permanent tax relief and the State Growth Fund and  Jobs and Growth Fund when windfall profits don’t exist?  Perhaps a decrease in military spending could be the solution as we pull out of Iraq.

The Effectiveness of Stimulus Checks

How exactly would a $1000 stimulus check help American families. Obama claims it would:

• Offset the entire increase in gas prices for a working family over the next four months
• Pay for the entire increase in winter heating bills for a typical family in a cold-weather state

The first suggestion is reminiscent of the gas tax holiday proposed by McCain and Clinton that Obama critized as a “short-term quick fix”.  Stimulus checks are not a new idea, and I can’t help but wonder if Obama is simply following Bush’s plan that caused a short term boost to the struggling economy this spring to win votes.  What did you spend your stimulus check on?  I put mine in an IRA, which is probably what I would do with another one. I am learning to live more frugally during these times of high gas prices, and one check won’t go far enough to change that. It is important to remember though, that stimulus checks are only one part, and probably the least significant part, of Obama’s Emergency Economic Plan.

Image: freefoto

Related posts on Obama, energy, and the economy:

• Obama Campaign Seeks to Make Oil Prices Irrelevant

• McCain and Obama Differ on Energy

• It’s Not the Economy; It’s the Environment!