The Obama Administration: To Spend or Not to Spend?

The present events suggest that America is faltering and is losing so much money fast. The economy has become unstable and financial institutions are either holding their funds or are declaring bankruptcy. The American middle-class for example have taken the most impact as job scarcity is seen everywhere. Businesses and even the government departments themselves are massively laying-off workers. Finding a job today is just like finding a grain of rice in a sandy beach. And the results are definitely shocking as America’s future is put at stake.

There is a big decision that Pres. Obama has to make and that is if the government should spend more or lessen spending. There are certain points that we should consider. First is that job growth is stagnant and the unemployment rate is almost near 10%. The number of people who have remained unemployed for the last 6 months have almost reached 7 million and more are getting discouraged to seek for one. The foreclosures of banks have exceeded last year’s figures and mortgages are on a record low. Indeed, the Obama administration needs to take the right decision now to at least alleviate the problem.

Have you ever heard of the economic stimulus fund which amounted to $787 but now has ballooned to $862 billion? A lot of people actually opposed the idea of a stimulus indicating that it only made the budget deficit bigger. Pres. Obama’s economic recovery strategy is based on John Maynard Keynes strategy which calls for more government spending to battle recession. More spending by the government would mean more cash that can be used by both consumers and businesses in doing economic activities.

But the problem is people are already convinced that any further spending by the government will only hurt the nation. In a country where the national debt has already reached $13 trillion, citizens have already developed a mindset where more government spending will only add up to the budget deficit and will only put more burdens to its citizens. In fact, a study has showed that two-thirds of the respondents opposed the idea of a second stimulus package while 53% said the country is better off without the first stimulus.

It is indeed a tough and complicated task by Pres. Obama and his administration to make people believe that they are doing the right thing in helping America get out of the recession. Pres. Obama and his team of economic advisers are faced by the dilemma of balancing in order to avoid both overspending and under-spending. In order to gather that needed support, the government should first provide a rational and reasonable explanation on how will the government act to put the nation back to economic recovery. And if the government is really sincere in helping the nation, they should first cut and avoid projects and earmarks that are not really beneficial to the American people.