Barack Obama has not done a good job of explaining his stimulus bill to the American public. The problem with the economy right now is that businesses are not doing well, so they are laying off people. This makes for more people that cannot afford their goods and so it spirals down. People can't afford a new car, so the dealership sells less, so they lay people off, so less people buy cars. I know 2 people who have been laid off and no one I know is getting a raise this year. But what is the government to do?
The first thing the government needs to do is to lower interest rates. Now that rates are about as low as they can go, the only thing the government can do is spend money. Mostly, it doesn't matter what they spend money on. Just like people, when they buy things, businesses do better, hire (or keep) more people, who then have the money to buy products. Even if they "waste" the money, it's still stimulus spending. World War II, for example, was stimulus spending that was 100% waste. Even if they bought tanks and planes and threw them in the ocean, it would create jobs and more people would have money to spend. There are really only three ways to spend money that will not create stimulus. The first is to stick the money in savings and not spend it. The second is to pay down loans. The banks actually lose money when that happens. The third is that the money leaves the country soon. We want the money to bounce from person to person as many times as possible in the country, preferably in town. If the money is spent on gasoline, for example, the local dealer gets the money, but then he buys gasoline with it, most of which is foreign, so it jumps right out of the country.
What Obama is planning is to spend the money where he thinks it will bounce many times within the country. He also spent or blacklisted many things in order to meet Republican objections. He put a lot of money in tax cuts because that is what Republicans demanded, but unfortunately probably half of tax cuts will go to those 3 things that don't stimulate the economy. Let's be honest. When you get your $500 check or tax break, you'll most likely hold onto it, pay down your loans, or buy gas, clothes or something from Wal-mart (all foreign made items).
So, Obama is giving the states a lot of money. State spending is almost 100% people spending. States build roads, schools, and programs for the people that need it most. Obama is also spending loads of money on healthcare. If you need to spend, you might as well buy something you've always wanted. You may think you don't want government sponsored healthcare, but you do. Medicare is great and it works. It also keeps costs down. You probably know someone who has gotten hurt or sick but won't go to the doctor or hospital because they don't have insurance. I do. And your health shouldn't come before money, but healthcare is so expensive that sometimes it has to. My father was a millionaire. Until his wife got sick and she had no insurance, not that she hadn't tried to get insurance, she just couldn't get it because she couldn't pass the physical. When she got sick, it cost them $750,000. Needless to say, he's no longer a millionaire. Is that how we're all going to end up? We work and save for 50 years and then the drug and medical companies take everything when we need care at the end of our lives? I welcome Obama's expansion of Medicare.