In contrast to most of the nations with parliamentary systems of governments, where the head of state or president is primarily ceremonial, in U.S the President is specifically vested with vast authority and is perhaps the most influential elected official in the entire world. The founders of nation intended Presidency to be a restricted and narrow institution. The midterm elections of 2006, in which a general level of dissatisfaction prevailed with War in Iraq, supported Democrats gain authoritative control of Congress, a strong indication was made that the 2008 presidential campaign would be dominated by the foreign policy. But most of the polls in media indicated economy to be the dominant issue in the Presidential campaigns. Obama is of the view that “voters care little about candidates’ hurt feelings and a lot about an economy that is scaring them and a health-care system that isn’t working”. (Seib, 2008)
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As the number of deaths has declined in Iraq and the coverage of war in the news media decreased, majority of the American voters seemed to be less concerned about the foreign scenario and more about the current economic situation. In fact, apprehensions on the economy are cited two or three times more than the Iraq war, environment or health care. A fall in the prices of real estate is prompting the economic concerns. Payment of home mortgages has become one of the major concerns for Americans. Over the past few years, a drastic increase has been recorded in the number of people, with flexible interest-rate loans, not able to make their routine payments.
Another primary factor is the unpredictability of oil and gas prices. High prices of gas impact transportation, heating and food costs of Americans at a time when most of them confront different economic dilemmas. As such these were the dominant topics in the Presidential campaign. The economic proposals were main highlights of Obama and McCain’s Presidential campaigns. At the end, American voters chose Barack Obama as the President of United States. The current stage of the Presidential transition is witnessing significant political and policy changes. Based on the general scenario, briefly discussed above, Barack Obama is in the process of selecting his team and formulating certain plans to deliver the promises made in the Presidential campaign of 2008. Economy being the top most issue along with the current liquidity crunch, the agenda in the transitional phase focuses on financial crisis that can support in preventing the loss of jobs due to crisis. “Millions of Americans are looking for work but unable to find it in the weak economy” (Patterson, 2008).
Generating Investment and Creating Employment
It is pertinent to mention that by executing steps in the right direction and creating jobs can strengthen the economy and also support in eliminating financial crisis. The economic agenda of Barack Obama is pro-jobs to eliminate dependence of America on foreign oil and cut down healthcare costs. Mr. Obama is of the view that more aggressive steps are required to achieve a breakthrough for creating job opportunities. As a part of change in policies, Obama intends to provide a temporary tax credit to firms that will create more jobs in the country. The tax credit is expected to benefit all firms in creating new jobs. The newly elected President will provide small businesses an extra incentive for making fresh investment and commence the process of creating jobs through business tax incentives, on temporary basis, up to 2009.
Barack Obama firmly believes that a grave need exists for increasing the level of investment particularly in small businesses to create jobs and ensure recovery towards prosperity. Plans have been made to eliminate all types of capital gains taxes in start-up and small businesses. Obama’s team intends to cut taxes currently levied on small businesses. This step will lead to create jobs although his team is confronting limited access to credit. Emergency plan of Barack Obama is expected to make twenty five billion dollars to be utilized immediately in a ‘Jobs and Growth Fund’ to ensure that current and ongoing projects continue. It will provide sufficient funds to schools so they can afford to pay energy costs and ensure repairs due shortly. The investment generated in this fund is required to ease off budget strains on different projects, such as infrastructure. “The emergency plan will help ensure that in-progress and fast-tracked infrastructure projects are not sidelined”(Hess, 2008).
In an environment where American citizens confront increasing levels of unemployment, aggressive investment policies will be effective and can resolve the concerns related to financial crisis and some other grave issues including; job creation for supporting economic activities; increasing competitiveness in the market; and improving the overall environment. It is anticipated that Obama’s plan of generating investment of twenty five billion dollars will ultimately result in creating one million jobs and ultimately providing support to the economy.
Auto Industry and Immediate Relief for Families
Senator Obama advocated for fifty billion dollars in the shape of loan guarantee to support auto industry, develop entire new technology for battery and producing fuel efficient cars in America. However, only fifty percent of total amount was passed by the Congress. It is pertinent to mention that the administration increased the pace of first half while Congress swiftly enacted the final half. Obama and his team firmly believe that auto industry is facing extraordinary level of uncertainty. The small and mid-sized businesses suppliers are exposed to the threat of uncertainty and face higher risk.
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Even when the economy was enjoying prosperity, most of the families in America were not enjoying the benefits of tremendous growth. The non-elderly household witnessed a reduction in income by almost two thousand dollars from 2000 to 2007 as expenses also increased significantly. Moreover, the weekly wages are much lower, adjusted for inflation, than a decade earlier. The economic plan of Obama and Biden will result in providing relief to struggling families.
To support the struggling families and provide relief, Obama and Biden have suggested a tax cut of five hundred dollars for workers and one thousand dollars for families on permanent basis. Millions of Americans are confronting and experiencing a state of unemployment. However, due to the current fragile economy and the existing financial crisis almost one-in-five unemployed people have not been working for almost six months. To address the grave scenario, Obama supported to enhance the scope of unemployment insurance but there are thousands of workers, who have already used such benefits, do not enjoy any compensation for unemployment.
Support for Homeowners
Americans, during the last two years, have lost almost twenty percent of the value of their houses. In some areas, value of houses has decreased by almost fifty percent. It means more families are facing hardships in an economy which is already in recession phase. These families are facing difficulties to meet their regular mortgage payments. Many states are also considering the fact that high level of property taxes will further create a burden on homeowners. Plans formulated by Joe Biden and Barack Obama in Presidential transition supports in providing huge relief to the American homeowners for making payment of their mortgages, keeping the ownership, and protecting them form increase in taxes. The plan also helps taxpayers while avoiding to help those who are the real cause of current financial crisis.
Obama, Biden and their team are stressing Housing and Urban Development and Treasury to develop a policy focusing on working with different housing agencies at the state level and coordinate restructuring of mortgages. They are calling to formulate laws related with the ambiguities and doubts in the bankruptcy code that permits bankruptcy judges to alter the mortgage terms and conditions on vacation homes and also on specific investment real estates but not on personal residences.
The incoming President should try to provide a major breakthrough necessary in confronting the challenges presented by the current economic scenario. The incoming administration should tackle the serious threats not only at home but abroad. Most of the current programs, as highlighted by a segment of scholars, lack efficient management system, organization, or leadership required for effective performance. The new President can face serious threats of failures if he attempts to gain support form the already incapable organizations for addressing the issues in the current grave scenario. Therefore “Barack Obama’s overall economic plan will relieve the pressure on families but needs swift implementation.” (Stanton, 2008)
- Hess, S (2008) What Do We Do Now? : A Workbook for the President-elect, Brookings Institutions Press.
- Patterson, B (2008) To Serve the President: Continuity and Innovation in the White House Staff, Brookings Institution Press.
- Seib, G (2008) Wall Street’s Woes Challenge Both Candidates, the Wall street Journal
- Stanton, T (2008) Improving the Managerial Capacity of the Federal Government: A Public Administration Agenda for the Next President. Public Administration Review, 68, 1027-1036