Bob O'Brien
Head Instructor
bobrien@mywealth.com
Well it is no longer Mr. President-elect, and it is Mr. President! Quite a historic day in our nation, but how will President Obama’s economic policies affect you? There will certainly be some changes, but I think it is important that people realize that in the last century we had two presidents recognized as heroes for their economic policies. In addition, it is important to understand that their economic plan for the country was quite different.
President Roosevelt raised taxes on the wealthy during the recession in order to help stimulate the economy from the bottom up and this is generally referred to as Keynesian economics. This economic theory states that the government should be more of a player in the growth of the economy.
President Reagan generally did the opposite and looked to get government out of the way and let the private sector (business) drive the economy. This is generally referred to as supply side economics and you guessed it, Democrats tend to be Keynesians’ and Republicans tend to be supply sliders.
We are in a new economy now and President Obama’s plan should be a combination of the two. In fact, President Bush’s economic policies, especially over the last couple of months have been very Keynesian, with a lot of government intervention.
Here is couple of things that you are certain to see from the Obama Administration:
- Tax cuts and credits for seniors, lower and moderate income workers. You can be certain to see this, in fact President Bush did the same thing in his tax cuts.
- Tax cuts for companies that create jobs…. Jobs! Jobs! Jobs! America needs jobs! Obama will be rewarding anyone who can think of ways to create them.
- Infrastructure overhaul. The truth is we could really use it, and unfortunately it takes a major economic crisis to really get on top of things when it comes to our infrastructure. It will also create jobs, and the Obama Administration is not going to be afraid to borrow.
- Technology... It will be interesting to see how “innovative” government services become since President Obama is really the first tech oriented president. The health care industry
is certain to see some huge changes in this area, and government services should become more efficient.
- Inflation… We need inflation (I thought inflation was bad?). It is bad, but the only thing worse than inflation is “deflation”. Deflation is what we are experiencing now and President Obama would rather have inflation and tackle the inflationary problems when they come.
I have felt privileged to be able to view the incredible history being made before my very eyes over the last couple months. But when the inauguration bliss wears off, we are still going to find ourselves in an economic mess that does require all American’s assistance. One thing you can do is, get your own personal finances in order and encourage others to do the same. It will help the country and the global economy!
Please feel free to post a comment and feel free to e-mail me any questions!
Sincerely,
Bob O’Brien
Sr. Instructor
