House passes $819 billion stimulus bill- Response

This piece of information is crucial to my research. As the state of our economy continues to change, it is imperative that such large bills are covered within this blog. There are many circumstances pertaining to this event that make it incredibly crucial. First is the complete lack of bipartisanship from Republicans. This act shows none of the support called for by Obama from the House Republicans. With a total of 11 Democrats voting against the bill, the all around acceptance of this bill is now in question. It also puts the possibilities of passing the bill in the Senate that much bleaker. With 2 Republican votes needed, the success of this massive, and first piece of work completed by President Obama is now in question. I was thrilled to find this topic on the home page of the CNN website, immediately exemplifying the importance of this piece of legislature. There is no doubt that my topic, and the state of American economics as a whole, directly hinges upon the outcome of this bill. There is no certainty of the success of this bill should it pass at all. With so much spending, it puts into mind the incomprehensable debt building upon the American people. Should a President less than two weeks of office time be signing a check for more than $800 billion? This momentary success suggests so. However, if this plan fails to work, then both our economy, and the country's trust in our President lies in balance.

House passes $819 billion stimulus bill

On Wednesday evening, the House passes the $819 billion stimulus bill.
Despite Obama's push for bipartisan support, no republicans voted for it and 11 Democrats voted against it.
The final vote was 244-188.
Next week, the Senate will begin the vote on the bill.
"I hope that we can continue to strengthen this plan before it get's to my desk" President Obama stated. "We must move swiftly and boldly to put Americans back to work and that is exactly what this plan begins to do."
The package offers opportunity to immediately replace lost jobs and restart economic growth. Such features were exemplified by almost complete support by Democrats.
House Speak Nanci Pelosi states that this bill does good on the inaugural address delivered by Obama last week. She states that this bill begins taking America in a new direction.
The critics of the bill examine the monstrous spending affiliated with it, the potential effectivness, and the lack of tax cuts.
Republicans lean towards tax-cuts to quickly jumpstart the economy, not slow moving spending.
Voted down by the House was a Republican amendment that slashed spending for the bill and added tax-cuts.
To pass a Senate vote, the bill will need a total of 60 votes, which will require 2 republican votes.
It is agreed that the bill is needed on the President's desk before the law maker's recess on President's Day in mid February.

College On Credit- Response

This article was very disheartening, especially to a student who is beginning to look at colleges. However, I found it to be a very interesting idea that college education might be so heavily affected by this economic downfall. In this time, now is the worst time for college to become inaccessible to those who need it. In a world where a high school diploma hardly holds weight anymore, the idea that the mere cost of college would keep a student out of their hard earned education is terrifying. I've never thought of all the families who are struggling to heat their homes, let alone send a child to college. This country needs well educated college graduates now more than ever. We need a workforce that can be highly specialized and trained. It seems to me that the age of private colleges might have come to an end. As with the public school system, colleges may soon be going the same way.

College On Credit

College costs are becoming an often ignored factor of the economic recession.
Tuition costs are up 439% from the 1980s.
The average bill of college this year is $25,000.
Public universities are more affordable at $6,500 but still costly for some families.
More students are borrowing to finance their very own education.
Student debt has risen from $41 billion 10 years ago to $87 billion.
Two thirds who graduate from a four year program are in debt.
Although some colleges are starting to promise grants rather than loans, many colleges are stretching for money.
Many loans come from the government but as government funds are limited, much borrowing has turned to private sources.
Over the past academic year, $17.5 billion was borrowed from the private sector compared to $2.5 billion last year.
Private loans carry high interest rates. Up to 19%.
These loans are impossible to get out of even in the state of bankruptcy.
These loans are very tantalizing to desperate students and parents.

Liam's Third Response

Alex, it is interesting to hear comments from the Britsh givern that their auto industry imploded. I'm not sure we can expect the same thing to happen in the US that happened in England. Once people start buying plug-in electric hybrids they may start buying new cars more quickly than they have been. We may just have to bridge this transition first.

Your citations might need a little work. I used the site http://dianahacker.com/ as a reference.

Katie's 3rd Response

Great work Alex! A lot of your articles go right over my head, but I can tell you understand everything from your thoughtful and detailed responses. One thing: when I was grading your citations, I almost marked them wrong because you have them under websites, but I realized they were from magazines. I would make a separate section for them so you don't get them marked wrong in the future. For your research, maybe you could look at the speculations people have on the future of the stock market, alternative forms of earning money in addition to jobs, and maybe what businesses are doing to help their consumers and keep their business afloat at the same time.
Your blog is extremely intelligent-sounding, just like you, and the research seems to be developing nicely.

Jeanette's 3rd Response

Wow, Alex. I like all your opinions that you put into the responses. It makes reading them it clear what your thought path is. Another thing you might want to research is how the average American is dealing with the current economic situation. It would be interesting to know how other people or businesses are dealing with the money worries and recession. Other than that, I think your I-Search will be really interesting to read when it is done! :)

How the see us: Do U.S. carmakers deserve a break?- Response

I decided to continue on the topic of the auto industry with this article I found in "The Week" which is coincidentally the same magazine I drew my previous entry from. I found it extremely interesting to see just what the rest of the world thought of a situation that many Americans believe only affects the US population. This article brought to light though, just how far reaching the US auto industry is. I thought it to be almost amusing the Europe can't agree on the best fate for the auto industry any better than we ourselves can. Bailouts and bankruptcy both offer different potentials and potholes for the future of the industry in America. I had no idea that Britain has gone through the same crisis with their industry as we are now. One must ask though that if the auto industry essentially began in America, why did Britain's fall apart faster than ours? It certainly does bring new light to the phrase "history repeats itself". I personally do not feel that the auto industry entering Chapter 11 would cause such a disturbance nationally or even internationally. In a time when funds are not even available for many people to even purchase a car, it seems to me that this is the best time for these companies to take some downtime and reorganize. Better now than when the economy is strong and such a disturbance could potentially cause an even more significant ripple effect.

How the see us: Do U.S. carmakers deserve a break?

"Pity the poor Americans" says Jeremy Warner in Britains's Independent.
The American auto industry is now in the same position that British auto makers were 30 years ago.
The Big Three auto makers "pay themselves too much, they've failed to modernize, and they no longer produce the sort of cars that anyone wants to buy".
The US intends to do the same things that the British did when their auto companies were risked- handing out cash.
Howe this will not be enough as can be seen from the outcome of the efforts made by the British.
It is thought that by March, the auto makers will be back asking for even more money.
"Huge amounts of tax payers money were spent propping up this dying industry" in Britain and "very little was there to show for it in the end".
Jeremy Warner believes that instead of subjecting the American auto industry to a "slow death by a thousand cuts" which is what is believed to have been the what the British car makers endured, Warner claims that bankruptcy would do the auto makers better.
This is the only "long term solution".

However, there are indeed other opinions being spouted across the pond.
Quentin Willson in Britain's Sunday Mirror thinks that the US auto makers have done themselves in with "lousy management, kowtowing to unions, too many big-drinking trucks and SUV's, and an arrogant contempt for small acrs and green technology"- bold statements to be made by a journalist who reports for a country who is not directly tied to the US auto industries implosion. Or is he???
Willson thinks that allowing the US auto makers to enter into bankruptcy would have a "seismic effect on the US economy" but also "hurt Europe".
Chapter 11 would indeed allow the auto industry to reorganize and get back on track with out sucking billions of dollars out of the US government's pockets. It is thought that this might have effects more widespread though.
The auto manufacturers' suppliers would fail due to the lack of business from the US, and thus, the European auto market would also falter, due to their reliance on the very same suppliers.

Bush's vow to rescue Detroit- Response

This article was somewhat outdated however, the publication date of the article I was taking information from was within the two week time period. I had yet to really focus on the potential auto bail out in my research and thought that it would be critical to my research to do so now and to be able to follow it as it progressed. These bailout will be extremely critical in how this financial crisis proceeds. With the deficit closing in on $1 trillion dollars, it seems as though now is no time to be bailing more companies out. However, this article offered some very interesting points as to how this bailout might help the recovery of the auto industry, and the US economy. I found it to be a very interesting idea that this bailout would provide the Obama administration with much more leverage over the auto industry than before. However, I find this to be a horrifying concept. There is no reason that the US government should have any more control over the auto industry than it should have over the computer industry, or the boat industry, or any industry for that matter. The US government has no place in corporate America other than to enforce laws and Constitutional rights. The failure of an industry is a sign that it needs to be reformed and the placing of such companies under more jurisdiction from the US government will in no way help the reformation of such companies. As stated in the notes, "Chapter 11 would provide an opportunity for these companies to reorganize themselves". This is exactly what chapter 11 was designed to do and it has worked out so far. That is, until the apparent relization that certain industries were too closely tied to the US economy came about. It seems to me that any industry that is that closely tied to the US economy needs to be reorganized as it is.

Bush's vow to rescue Detroit

The Senate rejected a $14 billion dollar bailout plan for the auto industry.
The Bush administration, auto executives, and union leaders scrambled to put together a bail out plan.
With little time left, auto makers hurried to look for cash, even looking into the $700 billion financial bailout plan, which would not requite congressional approval.
Opposition from Republicans in the Senate led to the failure of the original Congressional bailout plan.
General Motors and Chrysler have been cutting jobs and slashing spending but still claimed that a direct infusion of cash was necessary.
Chrysler staked claim to $4 billion while GM asked for $10 billion, claiming that this money would be essential to keep them running through march.
Ford did not claim to require bailout help.
President Bush claimed to be committed to constructing a bailout package for the auto industry.
"By refusing to write a blank check to Detroit, Senate Republicans have started to reclaim some credibility on fiscal policy and the role of government." stated the Wall Street Journal.
The common belief is that no amount of bailout monies will save the auto industry without massive restructuring.
This would include a reduction of union wages and benefits.
There is another side to the bailout however, one that is embedded in the future administrations of the US government.
Such a bail out would provide the Obama administration and Congress "huge leverage over the cars Detroit builds"- this is a power that many organizations have craved for decades.
The Big Three auto makers only pay around $10 more an hour in wages and benefits than Toyota and other foreign car makers in the US.
Detroit's labor costs are much higher however due to the fact that they have been in existence for longer and thus have hundreds of thousands of retired workers receiving pensions and benefits.
Some see the potential bankruptcy of the auto makers as the way out. Stock holders will loose massive amounts of money however, placing the companies under Chapter 11 will free them from past obligations and thus allow them to produce better products, not focus their out put on profit needed to meet past obligations.\