Massive economic stimulus plan revealed

President Barack Obama has announce
a six-year plan to revamp the United States’ aging roads, railways and runways
with a $50 billion up-front investment to jump-start job creation.

The plan is one of several economic
initiatives  Obama will unveil this week
aimed at generating some desperately needed U.S. job growth and limiting
predicted Democratic losses in 2 November  congressional elections.

Administration officials say Obama
will ask Congress Wednesday to increase and permanently extend a tax credit for
business research as a
way of boosting job growth
.

The proposal would cost $100
billion over 10 years.

But economists are sceptical any
measures Obama takes now will make a significant difference in the $13.2
trillion U.S. economy and point out that investments in infrastructure
typically do not stimulate the economy quickly.

A senior administration official
acknowledged the infrastructure plan will not immediately stimulate the economy
and that the first jobs it creates will be in 2011.

The plan would mean jobs “over
the course of 2011 … This is a six-year reauthorization (of transportation
projects) that is front-loaded,” the official said.

The White House also stressed that
the plan would not add to the record government deficit, a key issue for
voters, but Obama is likely to face strong scepticism from deficit hawks among
opposition Republicans, who are hoping to take control of the House of
Representatives in November.

Asked how the administration planned
to pay for the infrastructure overhaul, a senior administration official said
one option was to close tax breaks for oil and gas companies.

Under the infrastructure plan,
Obama is proposing to:
– Rebuild 150,000 miles of roads;
– Construct and maintain 4,000 miles of rail;
– Rehabilitate or reconstruct 150 miles of runway and modernize the air traffic
control system and;
– Set up an infrastructure bank to leverage private, state and local capital to
invest in projects.

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