The plan is supposedly 447 billion. By my count about 253 billion of that is in tax cuts. Corporations are sitting on a ton of money, tax cuts will not make them hire. Minor tax cuts for households will be used primarily for debt de-leveraging unless there is a general recovery with wage increases, since people will not spend in a depressionary environment. Most of the spending is on projects which are run by states, and the money is fungible and will be effectively diverted to avoid tax increases.
There are no structural fixes for what is wrong with the economy here. There is nothing to deal with the fact that even if it did work (it won’t) it would cause a run up in commodity prices, especially oil, which would crush the recovery anyway. There is nothing to deal with the fact that most US banks are still bankrupt, except some incentives for Americans to buy houses so securitization can continue. There is nothing to stop employers from calculation the tax rebates as effective raises, and thus not offering raises themselves (which is what they will do.) There is nothing to make any corporation which already doesn’t pay taxes (more than you want to think about) to pay those taxes.
This stimulus is more than half tax cuts, which is worse than the first stimulus. It is not as large as the first stimulus. It will probably save or create a few jobs, but it will not kick the country out of depression.
All of this even assuming you’re stupid enough to believe this will pass as envisioned. It won’t. Obama is a weak president, and the Republicans will not pass most of the useful parts of this bill, though no doubt they’ll be happy to pass the tax cuts.
Oh, and Obama wants the entire thing offset by deficit reduction. Given how weak a stimulus this is to begin with, I predict that if passed with offsets it WILL DO MORE DAMAGE TO THE ECONOMY THAN GOOD.
I see various progressives who think talk matters are cheering the wording of Obama’s speech. He sure does talk purdy, doesn’t he? Reminds me of his promises during the election campaign, in fact.
(White House Fact Sheet) (pdf)