An Open Letter to President Elect Barack Obama on the Fiscal Stimulus Package
Editor’s Note: This op-ed was written by students from the Presidio School of Management including Steve Pierson, Kaytea Petro, Lina Constantinovici and Brian Bishop. It does not represent the views of the institution.
First of all, congratulations on your resounding win! Many of us campaigned tirelessly for you, and we opened our doors and our hearts to join you in celebration last night. This is a great victory we will savor for years to come!
Americans have heard a great deal about hope and change during this election season. Together, those two words evoke a compelling vision for the future of our nation. Once the election is over, the questions for our policy makers (at all levels) will be how to move the nation towards this positive future, especially in the face of an economically challenged present.
One major obstacle that you will face is the snowballing foreclosure rate. Today, three of every hundred homes with mortgages are in foreclosure. Waves of layoffs and business closures follow close on the heels of these foreclosures. Public confidence that they elected the right team to effect a positive future may soon fade, replaced with a grim downturn on Main Street: the main artery through our American towns.
Over-dependence on foreign oil and the effects of global climate change represent immediate threats to the prosperity of our nation. In response, your campaign promised action toward energy independence and investment in green energy technology and solutions. At first glance, the economic crisis may seem like an impediment to these investments. But we, students at Presidio School of Management, would like to suggest a response to address these two challenges.
The federal government is already committed to creating a substantial economic stimulus program – the specifics are yet to be defined. The federal government has already taken ownership of a great many “toxic” mortgages. Why not do the following:
- Design substantial tax incentives for residential energy and water efficiency improvements such as efficient windows, weather stripping, efficient lighting, insulation for attics, walls, pipes and water heaters, low-flow toilets and showerheads. The short-term goal would be to give a boost to local building and home improvement businesses, injecting capital into an industry that has been experiencing rough times for over a year. The benefit for the homeowner of this investment will be comfortable homes that use less energy, lowered utility bills, and have increased property values. The long term effect for local communities will be that we will have invested significantly in our infrastructure, reducing our need to build new power plants, dams or implement water rationing to our thirsty farms.
- Offer attractive renegotiation packages to homeowners who are struggling with disastrous mortgages, but make the most attractive options contingent upon energy efficiency improvements to the property. Provide generous credits or subsidies to minimize out-of-pocket cost, and roll the rest of the cost into a renegotiated mortgage. If mortgage-holders need to be rescued anyway, why not leverage the plan to boost local jobs and businesses and help America achieve energy independence?
- These efficiency incentives could be offered to commercial real estate owners and local governments as well. In this way, all sectors of society can benefit from the tax incentives and the reduced operating cost created by the efficiencies.
Together, these programs directly target Main Street businesses, jobs, and homes. They also will dramatically reduce our nation’s energy consumption and global warming emissions. Buildings represent a huge portion of our total energy usage, and efficiency improvements are extremely cost effective, especially in older and more modest homes. But this plan does not only stop there, it is a cogent economic stimulus plan.
After September 11, Americans were told to go shopping to keep the economy going; seven years later, we do need to spend money to keep our economy going, but we need to spend it in a way that it benefits American businesses and jobs. Spending money on energy and water efficiency improvements means living-wage local jobs (home improvement projects can’t be outsourced to China), local purchases of supplies, not to mention long-term reduced cost of living, reduced carbon release, and more stable economies.
We believe that utilizing our current crisis as a crucible to drive the affordable energy solutions of tomorrow makes perfect sense: Homeowners get to stay in homes with reinforced property value. “Joe the Insulator” and his crew have thriving work instead of a hard downturn. And America enjoys more prosperity and increased energy independence. These solutions create jobs today, get the economy back on track for all Americans, and set the stage for America’s next Golden Age.
Once again, congratulations. We believe it more than ever: Yes We Can.