YES, we can! SPECIAL TOPICS IN ECONOMICS: Social, Political, and Ecological Economics Dr. Germelino Bautista Ateneo de Manila University February 2009

Content: EXTERNAL PROBLEMS MATHEW ONG: War on Terrorism LEONARD DE LEON: Global Poverty VERONICA LOPEZ: UN, Millenium Development Goals JERRY RIMANDO: Technology Gap between Rich and Poor (Digital Divide) INTERNAL PROBLEMS MARK LIM: Environmental Problem (Alternative Fuel?) GABRIEL MAGNO: American Market, Culture ALAN JARANTILLA: Social Welfare: Health and Education PAOLO LAYUG: Economic Recession on Car Industry and Financing Industry NICCOLE ALVENDIA: US Politics

War in Mindanao Mathew Ian Ong

Nearly 40 years since the Mindanao wished for autonomy from the Philippines’ government and that wished has escalated to a full fledge War that has brought unimaginable casualty on both sides. Now we try to understand if there is a more mature fashion in which we could handle the sensitive situation in Mindanao. Taking a look at the promises and reform that the newly appointed US president Barack Obama regarding “War on Terrorism”, let us imagine how president Obama will try to resolve the issue regarding War in the Philippines. First of all, President Obama takes the moral as well as the national interest into consideration, showing that a War in the Philippines is not at the best interest of the nation. He will rather focus on a defensive approach to prevent further terrorist attacks on civilian location such as the hostile takeover of MILF in certain villages. President Obama gives importance to education and health. Education can be use to discontinue the conflict among fellow Filipino people by educating the future leaders of the country, showing us commonality rather than difference. He will provide non-military aid to Mindanao so that it will see the Philippine government as a friend rather than a foe. If there was a terrorist attack by terrorist group, President Obama would 1st find out who exactly is responsible and will take the leader and his lieutenants into custody and not wage war on the country or its island. The overall view of President Obama with regards on war is that it causes poverty and casualty on both sides. He would rather increase the budget on national defense rather than waging war with another country. If ever terrorist were to attack the country, he would go after those responsible and punish them according to the law or judgment. References: http://www.globalresearch.ca/index.php?context=va&aid=9995 http://www.suntimes.com/news/hunter/494187,CST-NWS-hunter02.article http://terrorism.about.com/od/issuestrends/a/BarackObama.htm

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The Global Poverty Act Leo de Leon

In his bid to bring change to U.S. foreign policy, Pres. Barack Obama and Vice Pres. Joe Biden have set the wheels in motion regarding the Global Poverty Act. As part of their platform for the elections, Obama and Biden proposed the embracing of the Millennium Development Goal to cut extreme poverty in half by the year 2015 (extreme poverty defined as living on less than $1 a day). Some elements of this plan include the full cancellation of debt of Heavily Indebted Poor Countries via sustainable debt relief, investment of at least $50 billion by 2013 to continue fighting for the alleviation of HIV/AIDS, all in addition to the US part of the Global Fund. Obama, a socialist, released this statement regarding his view on global poverty:

"With billions of people living on just dollars a day around the world, global poverty remains one of the greatest challenges and tragedies the international community faces. It must be a priority of American foreign policy to commit to eliminating extreme poverty and ensuring every child has food, shelter, and clean drinking water. As we strive to rebuild America's standing in the world, this important bill will demonstrate our promise and commitment to those in the developing world… Our commitment to the global economy must extend beyond trade agreements that are more about increasing profits than about helping workers and small farmers everywhere… It is time the United States makes it a priority of our foreign policy to meet this goal and help those who are struggling day to day.”

The Global Poverty Act, also known as S. 2433, addresses the U.N.’s Millenium Development Goal, and adds on, as Obama’s administration pushes to tackle global poverty in a more holistic manner. The content of the act state the following strategies:

(1) Continued investment or involvement in existing United States initiatives related to international poverty reduction, such as the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 (22 U.S.C. 7601 et seq.), the Millennium Challenge Act of 2003 (22 U.S.C. 7701 et seq.), and trade preference programs for developing countries, such as the African Growth and Opportunity Act (19 U.S.C. 3701 et seq.). (2) Improving the effectiveness of development assistance and making available additional overall United States assistance levels as appropriate.

(3) Enhancing and expanding debt relief as appropriate. (4) Leveraging United States trade policy where possible to enhance economic development prospects for developing countries. (5) Coordinating efforts and working in cooperation with developed and developing countries, international organizations, and international financial institutions. (6) Mobilizing and leveraging the participation of businesses, United States and international nongovernmental organizations, civil society, and public private partnerships. (7) Coordinating the goal of poverty reduction with other development goals, such as combating the spread of preventable diseases such as HIV/AIDS, tuberculosis, and malaria, increasing access to potable water and basic sanitation,

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reducing hunger and malnutrition, and improving access to and quality of education at all levels regardless of gender. (8) Integrating principles of sustainable development and entrepreneurship into policies and programs.

In 2005, the US was under fire due to Jeffrey Sachs, a Columbia University economist who submitted to the U.N. his report on research done by a multitude of poverty specialists. He criticized the US for appropriating merely $16.5 billion a year in global anti-poverty aid, and further claims that the United States should increase this appropriation by $30 billion yearly to meet the target of 0.7% of GNP set by the U.N. for the United States in 2000. Roughly, the whole amount to be paid by the United States to aid the anti-poverty campaign would equal $845 billion spread over the next 13 years. It is apparent that this may be a measure that Pres. Obama will be willing to take. But is it a step that America is willing to take with him? Much criticism has arisen recently; stating that such a move may help alleviate poverty globally, but exacerbate local poverty. Others say Obama would be throwing fish at the poor man, rather than teaching him how to fish. Still others say that Obama’s socialistic ideal is playing straight into the U.N.’s hands, giving the U.N. a tighter grasp over US law, as they would become subject to the U.N.’s several protocols that may affect American rights. If Obama succeeds in creating a strategy that will keep all sides and parties satisfied, then he will surely be noted as one of history’s great leaders and visionaries. But for now, we’ll just have to wait and see. References: http://www.capmag.com/article.asp?ID=5152 http://origin.barackobama.com/issues/foreign_policy/ http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=110_cong_bills&docid=f:s2433is.txt.pdf http://www.wnd.com/index.php?fa=PAGE.view&pageId=56405

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THE MILLENNIUM DEVELOPMENT GOALS Veronica Lopez

In 2001, the member states of the UN have agreed to achieve the Millennium Development Goals (MDG) by the year 2015. These eight international development goals, based on the eight chapters of the UN Millennium Declaration, each have their own specific targets that must be met. The eight goals are as follows:

• Eradicate extreme poverty and hunger • Achieve universal primary education • Promote gender equality and empower women • Reduce child mortality • Improve maternal health • Combat HIV/AIDS, malaria and other diseases • Ensure environmental sustainability • Develop a global partnership for development

PROGRESS UNDER THE BUSH ADMINISTRATION The creation of the MDG happened to coincide with the beginning of the Bush administration, and his term from 2001 to 2008 encompasses almost half of the MDG’s stated duration, thus making his leadership role vital in meeting the aforementioned goals. But throughout this term, controversies have risen regarding his administrations’ lack of commitment to the MDGs, with certain policies enacted by the state having been deemed self-serving by international critics and fellow UN members. Perhaps the most controversial issue regarding foreign aid at that time was John Bolton, who was then the US Ambassador to the UN, and his suggestion to remove from the 2005 World Summit document a large section referring to the MDGs, claiming that the Bush administration never agreed to support the entirety of the goals, particularly the part which requires them to increase foreign aid commitment. Unsurprisingly, Bush reiterated his commitment to the MDGs in his speech during the summit itself, and proceeded to enumerate concrete measures of how he plans to continue to do this. Nevertheless, most of these policy implementations geared towards meeting the MDGs remain lax at best. A UN campaign director for the MDG recently expressed her dissatisfaction over Bush’s half-hearted attempt in trying to meet the goals, stating that while he did keep his promise on providing international aid, the president hardly contributed any effort towards meeting the other targets for developing countries. Other studies have shown that even the development aid from the US has been declining since 2004. Despite the government’s claim that their donations have doubled ever since the inception of the MDG plans, the US continues to give a smaller share of its national income compared to other developed states. As of 2007, it was estimated that the US donates only 16 cents for every $100 in earns, whereas other developed nations contribute an average of 28 cents per $100. Nevertheless, it is still a far cry from the MDG’s target of raising development aid from rich countries to 70 cents per $100. Policy loopholes have been frequently utilized as an excuse from disbursing aid to certain agencies. For instance, a 1985 amendment passed by the US Congress allowed the incumbent president discretion to withhold funding for any group or agency involved in

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coercive abortion and/or sterilization measures. This has been regularly cited as the Bush administration’s reason for not taking a more active role in the achieving the targets for the fifth MDG referring to the improvement of maternal health. And even in the wake of Hurricane Katrina and the devastation that it brought to the US, the country refuses to recognize the significance of the Kyoto Protocol and is yet to ratify it as part of their country’s policy. Thus, the US until now remains one of the many of countries who choose not to contribute to the fight against global warming and other threats to the environment. OBAMA AND THE MDGs For the UN and the developing world at large, it appears that the future of the MDGs under Obama is much brighter than how it was under Bush. During his election campaign, Obama stated announced:“The United Nations has embraced the Millennium Development Goals, which aim to cut extreme poverty in half by 2015. When I’m president, they will be American goals.” and stressed that although he expects disagreements to arise on certain aspects of governance, one cannot deny that the Americans share a bond of humanity with everyone else in the world, hence the importance of investing in that common humanity. Some idealists even go so far as to attribute Obama’s personal history (ie. having an African father, a mother working for the Ford Foundation and growing up in South East Asia) as a possible reason for his solid commitment to issues on global development. Indeed, even as a US senator Obama has already taken steps in addressing international development issues. In 2005, Obama co-sponsored the International Cooperation to Meet the Millennium Development Goals Act, which was meant to “target US assistance towards the world’s weakest states in an effort to build healthy and educated communities, reduce poverty, develop markets, and generate wealth”, in addition to “ensuring that increases in US assistance are matched by our partners in the G8”. And again in 2007, Obama sponsored Senate Bill 2433 or the Global Poverty Act, which would “require the President to develop and implement a comprehensive strategy to further the United States foreign policy objective of promoting the reduction of global poverty, the elimination of extreme global poverty”. Throughout his campaign, Obama has mentioned some of the possible actions that he plans to take in furthering the cause of international development: General aid and poverty

• Doubling annual foreign assistance form $25 billion to $50 billion • Increased funding of up to $1.3b annually and innovative programs like 'play

pumps,' in order to expand access to clean water and sanitation Education

• Establishing a $2 billion Global Education Fund in order to erase the global primary education gap

• Supporting Hillary Clinton’s Education for All Act which would rally funding of $10 billion annually

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Combating disease

• Lifting the 33% cap on US contributions to the Global Fund, ensuring at least 4.5 million people are on ARV treatment by 2013, and preventing 12 million new infections

• Double funding for the President's Malaria Initiative and dramatically expand access to mosquito nets

• Continuation of Bush’s PEPFAR Program (President’s Emergency Plan for AIDS Relief)

Child and maternal health • Increase funding for child and maternal health and ensure that increases in other

important areas - including HIV/AIDS - do not come at the expense of child health and survival programs

• Expand access to vaccinations, increase research into new vaccines, and expand access to reproductive health programs.

Environment • Aiming to generate 25 percent of electricity from renewable sources by 2025 • Setting cap-and-trade programs to reduce the nation’s GHG emissions 80

percent by 2050 • Investing $150 billion over the next ten years in clean technology • Putting 1 million plug-in hybrid cars on the road by 2015

References: A Reality Check on Bush’s Speech to the UN World Summit. http://www.commondreams.org/views05/0916-29.htm Groups say Bush administration continues to block progress as UN summit. http://www.unep.org/greenroom/WEDOreleases.asp Maternal Health Donations Overflow Bush Blockade. http://www.womensenews.org/article.cfm/dyn/aid/3378 Millennium Development Goals. http://en.wikipedia.org/wiki/UN_Millennium_Development_Goals#Progress Obama could make “amazing difference for poor: UN aid chief. http://www.google.com/hostednews/afp/article/ALeqM5igrdqQiy-dnkTV_l0Lf9DmCl88Rw Poverty-reduction Aid Lags. http://lawprofessors.typepad.com/healthlawprof_blog/2008/09/poverty-reducti.html World Leaders Expected To Address MDG Targets During World Summit. http://www.globalhealthreporting.org/article.asp?DR_ID=32536 ANALYSIS: Obama vs. McCain on U.S.-U.N. Relations. http://www.globalsolutions.org/in_the_news/analysis_obama_vs_mccain_u_s_u_n_relations The Obama-Biden plan to combat global HIV/AIDS. http://change.gov/pages/the_obama_biden_plan_to_combat_global_hiv_aids/ Will Obama’s Administration Make a Difference to Global Citizens? http://www.ids.ac.uk/go/about-ids/news-and-analysis/january-2009-news/obama-s-impact-on-global-citizens Obama talks Global Poverty to CGI. http://www.one.org/blog/2008/09/25/obama-talks-global-poverty-to-cgi/ Candidate comparison results. http://www.onevote08.org/ontherecord/compare.html?c=3&c=8&c=13 New Energy for America. http://my.barackobama.com/page/content/newenergy

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Technology Gap between the Rich and Poor (Digital Divide)

Jerry Rimando There is an acknowledgement that technology is quickly changing, and that the potential for its usage is being undermined. The Obama government believes in the usage of technology to connect its citizens to the United States government, while at the same time, use technology to resolve some of the more pressing problems, such as education, health, and poverty. To achieve this, Obama plans the following goals. First, Obama wants to ensure the full and free exchange of ideas through an open Internet and diverse media outlets. He is focusing on the availability of the Internet for everyone, as access to the Internet allows any individual access to many other services. Second, Obama wants to create a transparent and connected Democracy. Using the Internet and advanced technologies, government information and services are made more accessible to the people. Third, Obama wants do deploy a modern communications infrastructure among agencies, and this would make better use of existing communication structures. Fourth, there is a need to increase America’s competitiveness by investing in research and development and in the sciences. Fifth, focus on the development of the children as Obama aims to prepare the children for the 21st century. He wants to make math and science education a national priority, and balances this by aiming to reduce dropout rates. Sixth, for the adults, Obama wants to prepare them for a changing economy by providing safety nets that would provide opportunities for work and stability in their occupations. Lastly, Obama wants to employ science, technology and innovation to solve America’s most pressing problems, such as health care, climate change, and stem cell research. Obama has many goals in his attempt to lessen the technology divide between the rich and the poor. Despite this, he wants to ensure the accessibility of the Internet as the primary target in the issue of technology. There are initiatives, both from him and from others, that are aimed to achieve that purpose. To have Internet for every citizen is necessary as the Internet can easily provide access to financial capital (by means of online banks), human capital (online medicine and available educational materials), and social capital (people’s organizations and work opportunities). In the same way, the Internet is a tool to ensure that the government does not leave out every citizen, as change is intended for all Americans. Obama believes that his work should affect all individuals, and so, he is using the available means and technologies to get to the grassroots and achieve his purpose. Whether or not all his goals are achievable in the next four years, it is clear that Obama believes in adapting to the changes in society, and using this in a way that can benefit everyone involved. Reference: http://change.gov/agenda/technology_agenda/

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Environment Mark Lim

Barack Obama is a man who has a vision and knows that in order for a country to progress, necessary changes must be made. When he announced to the people the changes that he wants them to make, not all of them agreed, perhaps somewhere even against his new policies. Nevertheless, he knows that as a leader, he needs to tell the people he leads what they need to hear and not what they want to hear. This would be very different in the case of the Philippines since many of the politicians in the Philippines act in a way where they believe they must please everyone to avoid any conflicts or give the people any reason to hate them even if it will benefit the country. If Barack Obama were to lead the Philippines, the country would be a lot safer and cleaner place. Currently, there are many factories and cars that emit air pollutants that may be the reason why many people are sick in the country. Even the though the country claims to have a clean air act, it is not strictly implied and many of the people exposed to these air pollutants, especially young children, develop weak bodies and in turn make them more susceptible to other diseases. Barack Obama is currently promoting greener technologies and more fuel-efficient machines. Not only does this give the public cleaner air, it also helps fight the current climate change. When he went to have a talk with businessmen that mainly sell cars as their product, he told them that they to have to change their ways and produce cars that are more fuel-efficient. Of course nobody clapped and rooted for his cause, but Obama knew that even though these businessmen would probably hate him for his actions, he has to make a stand for his cause. He is willing to be hated by the people he leads as long as he is doing what he knows is right. He is also fighting for tougher regulaations on concentrated animal feeding operations to prevent air & water pollution. This is because manure spills kill millions of fish and jeopardize public health. The Philippines has a big part of its GDP on the agricultural sector. Cleaner and more efficient ways on breeding and transporting could really help the development of the country because there are already a lot of natural resources such as rivers that have been destroyed due to the people’s irresponsible ways of dealing with their wastes. If spending a little more money in necessary to ensure the safety of the public is necessary, I don’t see why any leader would stop to hesitate from doing this act. By being healthier, we can have people that are more productive as well as more natural resources that can be used to further help the development of a nation. There is an old saying that goes, “Prevention is better than cure.”

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American Market Gabriel Magno

America is in a recession. Over the past four months, it has been caught up in the vicious cycle underconsumption and unemployment. The sub-prime mortgage crisis of 2007 has evolved into a financial crisis and has now become a full-scale economic crisis that has reverberated all over the world. People are now less willing to consume, forcing corporations to both lessen production and layoff workers – nearly 2 million workers over the past four months with the unemployment rate at 7.6% – which leads to even less consumption, and the cycle continues. At the beginning of his term as President of the United States, Barack Obama has immediately taken measures that will transform the American people in every way possible. Examples of these include the closing of the Guantanamo Bay prison and cutting funding to groups that promote family planning. But as for the American public as a market, the scheme prepared by the present administration is the largest recovery or stimulus package ever in American history: more than $1 trillion (composed of a starting package worth $800 billion plus an extra $350 billion for the bailout of the financial sector). The short-term goal of the stimulus plan is to create or save jobs across several industries where the stimulus package will be used. According to a report by members of Obama’s Economic team, an estimated 3,675,000 jobs will be created or saved by the recovery plan. The breakdown would be 678,000 jobs in construction, 604,000 in retail trade, 499,000 in leisure and hospitality, 408,000 in manufacturing, 345,000 in professional and business services, 244,000 in government, 240,000 in education and health services, 214,000 in financial activities, 158,000 in wholesale trade, 99,000 in other services, 98,000 in transportation and warehousing, 50,000 in information, 26,000 in mining, and 11,000 in utilities. But the stimulus plan is also aimed at accomplishing the administration’s long-term goals. These include reducing energy use and carbon emissions, cutting middle-class taxes, upgrading neglected infrastructure, reining in healthcare costs and eventually reducing the budget deficit. The number of jobs created or saved by the stimulus package, though, does not give the complete picture on the whole issue. The administration still needs to be careful in where exactly to put the money. The US government is currently inheriting a trillion dollars worth of debt from the Bush administration, and spending the stimulus package unwisely can easily add another trillion to that debt, making it extremely difficult for future generations to recover. The administration also needs to evaluate its option by weighing present and future costs of a specific target of the stimulus. For example, infrastructure is definitely included. But it needs to work on the specifics of infrastructure by looking at future costs and benefits. Building new roads is a viable option, but future costs include future repairs of that same road. Road repairs are built faster and create 9% more jobs per dollar spent than constructing new roads. But undergoing more energy efficient transit projects also create 9% more jobs per dollar spent than building new roads, except that they take longer to finish. The administration must carefully consider all options when deciding where to use the stimulus package. There has yet to be a final vote for the stimulus plan on whether or not Congress will approve its implementation. The bill has not been passed due to insufficient support from Congress, especially from the Republican side, which prefers tax cuts as a means

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for inducing consumption. Recently, though, there has been some progress in the passage of the bill, as some Republicans as well as moderate Democrats have reached a compromise with the administration. The bill now stands at $827 billion due to reductions from the bill that includes a $40 billion cut from a “fiscal stabilization fund” for state government’s education costs. Other compromises include a $350 billion in tax cuts that would reach 95 percent of all Americans. Nearly all economists see the importance and necessity of President Obama’s stimulus plan. But the Unites States Congress ultimately has the final say. Time will run its course. Meanwhile, the American public will have to wait. References: Time Magazine. “One Trillion Dollars” January 26, 2009 “The Job Impact of the American Recovery and Reinvestment Plan,” by Christina Romer and Jared Bernstein “Deal announced on emergency stimulus plan,” by David Espo <http://news.yahoo.com/s/ap/20090207/ap_on_go_co/congress_stimulus>

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OBAMA’s Social Welfare Plan Allan Jarantilla

HEALTH CARE The Problem For president Obama, the problem with health care lies in the fact that the American people are caught between two extreme ways in which to tackle the health care problem that present their own weaknesses. If health care in America is completely government-run, then the costs will have to be burdened by the people through taxes that will raise the expenses of the American. If health care is run completely by the private sector, then insurance companies will be practising their businesses without a set of rules for the greater good of the American people. The Plan of Action Instead, President Obama has a different plan in mind. Obama plans roll back the bush tax cuts for Americans earning more than $250,000 a year and retain the estate tax at its 2009 level to pay for the $60 Million health care reform. Goals and Implementation Strategies President Obama’s Health Care Plan has 3 Main Goals. His administration aims to first, make health insurance affordable and accessible to all. Second, he aims to lower health care costs. And third, he plans to promote public health. First, President Obama plans to make health insurance affordable and accessible to all by building on the existing health care system and using the existing professionals in the health care profession to implement the strategy. President Obama also plans to make health insurance work for both the American people and businesses and not just for the insurance and drug companies. He will do this by:

• Requiring insurance companies to cover pre-existing conditions so that all Americans regardless of their health status or history can get comprehensive benefits at fair and stable premiums.

• Create a new Small Business Health Tax Credit to help small businesses provide affordable health insurance to their employees.

• Lower costs for businesses by covering a portion of the catastrophic health costs they pay in return for lower premiums for employees.

• Prevent insurers from overcharging doctors for their malpractice insurance and invest in proven strategies to reduce preventable medical errors.

• Make employer contributions fairer by requiring large employers that do not offer coverage or make a meaningful contribution to the cost of quality health coverage for their employees to contribute a percentage of payrolls toward the costs of their employees health care.

• Establish a National Health Insurance Exchange with a range of private insurance options as well as a new public plan based on benefits available to members of Congress that will allow individuals and small businesses to buy affordable health coverage.

• Ensure everyone who needs it will receive a tax credit for his or her premiums. Second, President Obama will lower health care costs by lowering the costs for a typical American family by $ 2,500 by investing in information technology,

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prevention and care coordination. Obama plans to achieve this by:

• Lower drug costs by allowing the importation of safe medicines from other developed countries, increasing the use of generic drugs in public programs and taking on drug companies that block cheaper generic medicines from the market

• Require hospitals to collect and report health care cost and quality data • Reduce the costs of catastrophic illnesses for employers and their employees. • Reform the insurance market to increase competition by taking on

anticompetitive activity that drives up prices without improving quality of care. Third, President Obama will promote public health by requiring coverage of preventive services, including cancer screenings, and will increase state and local preparedness for terrorist attacks and natural disasters.

EDUCATION The Problem The problem that President Obama sees with America’s education system has 3 main premises. First, that the No Child Left Behind Policy of the United States had not unfulfilled funding promises, inadequate implementation by the Education Department and shortcomings in the design of the law itself. As a result, the law has failed to provide high-quality teachers in every classroom and failed to adequately support and pay those teachers. Second, that there is a rising teacher retention problem, with many of the teachers opting to find other forms of work with better pay. Third is the rising cost of College or University education that leaves most of the graduate under enormous debt upon completing their education. Goals and Implementation Strategies President Obama’s Education plan has 3 main goals. First, he will make reforms on the No Child Left Behind Policy. Second, he will invest in early childhood education. Third, he will make College and University education more affordable to Americans. First, for efforts to reform the No Child Left Behind, President Obama will ensure an accountability system focusing on giving support to those who need it. Obama also plans to close down schools that are not performing well and replace them with new schools with better systems in place. He will make math and the sciences the top priority in education. He will address the drop-out problem by passing laws for intervention in middle school by adding personal academic plans, teaching teams, parent involvement, mentoring, intensive reading and math instruction, and extended learning time. Second, he will invest in early childhood education by increasing funding for preschool programs such as Head Start and Early Head Start while improving its quality. President Obama will also provide affordable and high-quality childcare to ease the burden on working families. Third, to make College and University education more affordable and accessible to Americans, President Obama plans to simplify the application process for financial aid. Obama will eliminate the current federal financial aid application and allow families to apply for educational financial aid by simply filing it on their tax form, eliminating the need for a separate application making the process faster. Also, Obama will make college affordable by creating a new American Opportunity Tax Credit which will make the first $4,000 of a college education free for most Americans and will cover two-thirds the cost of tuition at the average public college. In return for the benefit, the recipients will be required to conduct 100 hours of community service.

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References: http://www.barackobama.com/issues/healthcare/index.php http://www.barackobama.com/issues/education/index.php

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Obama on the Recession and Financial Crisis Paolo Layug

Recession. This is at the forefront of not only America, but of the entire globe. No doubt, the effects of the recession were caused by the “reckless greed and risk-taking” of financial institutions in the United States. Such institutions, which were tasked to estimate risk in order to safeguard the system, did not do their job properly and now have no choice but to ask the government for help. This issue is and will probably remain the main issue during Obama’s presidency. How his government acts to fix it will leave a lasting impression on his legacy. Obama recognizes that if things aren’t done now, then this recession could become even worse that it already is. With the economy in a recession, jobs may be lost and wages will be insufficient with rising prices. In order to combat this, Obama and his advisers have been trying to formulate a 2 year-stimulus plan that will lift the economy from it’s current state. The plan calls for swift and decisive action, and would benefit Americans with tax cuts, health care and educational benefits as well infuse investments in renewable energy and infrastructure. According to Obama, his plan “would allow more students to attend university, lower energy and health care bills and improve decaying schools and roads.” His tax cuts will be aimed towards the lower and middle-income groups, who are experiencing the worst of the recession. Furthermore, part of his plan is to create a fund that will help families with their mortgages. Currently, Republicans are skeptical of the stimulus plan, as they believe it may be too costly for the US government. What is important is that politicians understand the plight of Americans, most especially those in the lower income brackets. Obama sees this and, as the “agent of change”, people can rally behind him. Moreover, Obama realizes that even this stimulus plan won’t change things overnight – he understands it will take time and effort. It is up to him to be a sign of hope for Americans, so they can believe in something to get past such troubled times. References: http://news.sky.com/skynews/Home/World-News/Barack-Obama-Warns-Of-Recession-Legacy-While-Setting-Out-Economic-Stimulus-Proposals/Article/200901215199873?lpos=World_News_News_Your_Way_Region_8&lid=NewsYourWay_ARTICLE_15199873_Barack_Obama_Warns_Of_Recession_Legacy_While_Setting_Out_Economic_Stimulus_Proposals http://newsinfo.inquirer.net/breakingnews/world/view/20090125-185422/Obama-promotes-economy-stimulus-plan http://www.barackobama.com/2008/01/13/barack_obama_announces_plan_to.php

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US Politics Niccole Alvendia

With the presence of recession, President Obama has been struggling to regain the political initiative on combating the economic downturn. Since the start of recession in December 2007, there has been a rapid increase in the unemployment rate therefore recovery measures are deemed vital at this point in time. Some of the several actions the president has undertaken are first, the stimulus bill, with a plan to cut more than $100B from the $900B-plus package to gain the support of moderate Republicans, has been one of the topics of the ongoing debate in Congress. The compromise plan proposed by a group of centrist Republicans and Democrats would cut spending on items like health and education to bring the total to $780B, below the $819B package already agreed by the House of Representatives. According to President Obama, “The bill that has emerged from Congress is not perfect but it is the right size, it has the right scope and it has the right priorities”. Second, the president proposed a pay cap of $500,000 for the executives of large companies that receive “exceptional assistance” from the US government although it would only be limited to the salaries and bonuses of top executives. Chief executive officers and their like could still collect restricted stock, but only after government support had been repaid. Such decision goes to show that it is trying to hold the financial industry accountable to taxpayers while aiming to change an entrenched corporate culture that endorses outsize bonuses and perks that often bear little relationship to corporate performance. The plan’s effectiveness in curbing executive pay may not be known for years. Past administrations have also been critical of excessive pay, but corporate executives have found ingenious ways around limits, often hiring consultants to create new forms of compensation. It was a political necessity for the government to cut back executive pays for firms seeking for taxpayer assistance. The public cost of relieving failed banks runs into hundreds of billions of dollars. Yet banks pay tens of billions in bonuses, buy new corporate jets, and lavishly furnish their executives’ offices – or so the public perceives. Instead of spending on items that are non-beneficial to the public, it’s a wise move that a part of their salaries must be allocated to those who need it more. It’s about time that executives should be more responsible in managing their wealth to able to earn the trust of taxpayers whose funds are used to subsidize excessive compensation packages. Aside from this, President Obama must take a look at broader reforms so that executives are compensated for sound risk management and rewarded for growth measured over years, not just days or weeks. Reference: http://www.ft.com/cms/s/0/34d6448a-f44d-11dd-8e76-0000779fd2ac,dwp_uuid=a4559040-e7c3-11dd-b2a5-0000779fd2ac.html (Deal near on $780bn stimulus package) http://www.nytimes.com/2009/02/05/us/politics/05pay.html?_r=1 (In Curbing Pay, Obama Seeks to Alter Corporate Culture)

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