Instead of an immediate, permenant tax cut which would allow people to spend and invest their own hard earned money, President-elect Obama is proposing a massive increase in government expenditures (and ultimately taxes!) The Washington Post reports:
The package is expected to cost roughly $800 billion over two years. Obama has set ambitious goals for the plan, including a doubling in the production of alternative energy, modernizing 75 percent of the nation’s federal buildings, making 2 million homes more energy-efficient, computerizing health records in five years and providing an immediate tax cut of up to $1,000 for most Americans.
Obama’s own expert report says:
Because it takes time to carry out new spending programs authorized by legislation, we expect the jobs created by spending on infrastructure, education, health, and energy to be concentrated in 2010 and 2011. At the other extreme are funds to protect the most vulnerable, which are generally spent promptly, and tax incentives for businesses to invest quickly. State fiscal relief and broad-based tax cuts fall in between: funds for these programs can be disbursed quickly, but there can be a delay before the main response of spending.