Rebuilding our economy

Inheriting one of the worst economic crises this country has experienced since the Great Depression, President Barack Obama and Congressional Democrats have acted swiftly to limit the effects and scale of the recession and to speed up economic recovery.

Central to the president’s economic recovery plan is the American Recovery and Reinvestment Act, which will work to stimulate the economy and set the foundation for future economic growth.

The passage of the bill will be remembered as a landmark accomplishment for the Obama administration.

Nationally, unemployment is at 8.5 percent, the highest level since 1982, and the rate will probably continue to rise.

Indiana has been hit particularly hard. Currently, we have the ninth highest unemployment rate in the country at nearly 9.5 percent, and several counties have unemployment rates of well over 10 percent.

During the next two years, the American Recovery and Reinvestment Act will reduce the number of unemployed by creating or saving 3 million to 4 million jobs nationally and up to 75,000 jobs in Indiana, 90 percent of which will be in the private sector.

In southern Indiana, job creation is already beginning, with money going to Clark County and New Albany for projects to increase energy efficiency.

Universities across the nation are short of funding as a result of state budget shortfalls. Gov. Mitch Daniels has already stated that state schools can expect cuts in higher education spending, and IU President Michael McRobbie has announced a hiring freeze for 2009-10.

The $1.3 billion of stimulus money available for education in Indiana will help to offset proposed spending cuts, saving Indiana jobs.

Similar developments are occurring across the country as stimulus money allows state and local governments to hold onto teachers, law enforcement officials and other employees who were facing layoffs because of budget shortfalls.

The bill also puts money into the hands of families and individuals who are suffering the most during difficult times.

Thirty-seven percent of the bill consists of tax cuts, with much of the money going to working families, and funding has gone up for unemployment insurance and food stamps. Increased availability of Pell grants and the creation of a higher education tax cut will make college more affordable for students around the country.

By creating jobs and putting money into the hands of people in need, the bill will stimulate the economy as the money is spent by consumers and businesses, reducing the depth of the recession and the pain felt by millions of Americans. It is estimated that the bill will increase economic output by more than 3 percent in 2009 and 2010.

The American Recovery and Reinvestment Act also sets the groundwork for future economic growth. According to the Congressional Budget Office, about 30 percent of the bill’s spending goes to projects that will increase potential economic output.

Projects to make health care and energy more efficient and investments in roads, rail, education and the sciences will increase productivity and benefit the nation’s economy for decades to come.