What will stimulus plan mean for you? It may still be too early to tell
When looking at President Obama's $825 billion economic stimulus plan, it's tempting to dream about all the good it could do here in the suburbs.
• Brand-new roads and bridges that would divert some cars away from existing clogged highways.
• Grant funds that would let crowded suburban schools expand without hitting local taxpayers.
• Roughly $20 a week more in residents' paychecks, money that could be spent at suburban shops and restaurants.
The plan calls for a combination of roughly $275 billion in tax cuts and new spending on everything from highway construction to increased food stamp benefits.
Supporters of the proposal say it will create jobs in the suburbs and across the country via a series of investment programs. The proposal includes $43 billion for transportation projects, nearly $150 billion for education (including $41 billion in grants to local school districts) and $4 billion in grants to state and local police departments for the hiring of more officers.
In addition, the plan calls for tax cuts for workers - who could see $20 a week less withheld from their paychecks - and tax credits for businesses designed to get them hiring again.
Alexander Paris Jr., a Bartlett resident and vice president at Chicago-based Barrington Research, said that while much of the investment makes sense, he's disappointed that the proposal also includes more than $70 billion in social spending on things like food stamps and extended unemployment benefits.
"Those social earmarks might be worth doing, but they should be handled separately, not buried inside a bill that's supposed to stimulate the economy," Paris said. "Tax cuts for businesses, investments in roads and bridges and the electrical grid - these are the types of measures that are actually stimulative, that might bring a genuine return on the investment."
Long Grove resident David Klein, senior vice president/financial consultant with RBC Wealth Management in Vernon Hills, was more skeptical. He said the plan relies too much on spending and not enough on tax relief.
"We saw in the (Lyndon) Johnson era that new spending doesn't necessarily have a long-term positive effect on the economy," Klein said, noting that a severe recession immediately followed Johnson's administration. "Projects like building roads and bridges - those can take years. With a tax cut, on the other hand, people will see more money in their pockets almost overnight. It's the circulation of money that drives the economy."
Nancy Coutu, owner of Money Managers Advisory Inc. in Oak Brook, took the hardest line, saying there's little the government can do to fix the economy.
"I believe the government should back off at this point, and let the chips fall," Coutu said. "Yes, things will be painful for a while, but then, the economy will begin to right itself. Putting Band-Aids on problems, throwing money at institutions that got themselves into trouble - that just extends the problem."
• Daily Herald news services contributed to this report.