President Obamas’ program in order to stimulate the economy has taken the hurdles of the Congress after some compromises among the parties. It is the largest economic rescue program since Roosevelts New Deal. The 789 billion stimulus measures are split in 36 percent for tax cuts and 64 percents in spending. Nobody knows if the program is going to succeed. The Wall Street remains sceptic.
A gigantic amount of money will be spent in the future. The distribution of this sum will have an impact on the US as well as the international economy. The original “buy American” intention will not work because it violates international trade agreements, e.g. by the WTO. The US state has to invite external firms for its biddings. Thus international corporations can benefit as well as American ones. They could already peep through the fence.
Who are the beneficiaries?
This is a crucial question for companies, shareholders, investors and job seekers. Some tendencies can be worked out after analyzing the big items of the program:
Tax cuts to individuals and families, one time payments for retirees and disabled veterans, extended unemployment benefits help to stimulate the consumption. It is important that the population who lives on a small salary gets some financial relief, because this group among the population needs all the money for consumption. They do not receive enough money to save it, thus every extra dime will be spent. This helps the retailers that offer low price products, in particular high discount. A big player as WalMart might be a big beneficiary.
The next big group of beneficiaries are among the construction industry. The most prominent company is the famous construction equipment firm Caterpillar. Their dismissed workers can go back to work soon and their shareholders will be happy. Many expenses are dedicated to highway construction, bridges, rail projects, national ports, waterways. Such huge construction projects could bring juicy orders to international players, e.g. the concrete and cement producer Holcim.
The US government wants to extend the high speed internet access and they are going to invest in the renovation of the electrical grid. This will bring some more jobs for the telecommunication services and some more PC supplies to households with improved access to the web. The Swedish Swiss company Asea Brown Bovery could gather some orders for the restoration of the electric grid. Water-treatment facilities should get improved. Suppliers of water sewage and sanitation companies may expect orders.
Federal Buildings and school buildings will be made energy efficient. Suppliers for building insulating and modern, efficient heating equipment will be busy soon. Furthermore there is a budget to repair low-income homes. Thousands of small business owners and craftsmen can be involved in such a program. Renovated buildings and homes will need further equipments, e.g. new lavatories, bathrooms, kitchen equipment, plumbing facilities.
Where does really make money thanks of the program?
Fresh subsidies for health insurances will help more people to use health care and medical services. Pharmaceutical companies can sell more pills, e.g. Pfizer, Roche. The guys who get really rich are the specialists who design the computerized medical-record systems. The government wants to improve the health information technology. The supplier must be a highly sophisticated software company. They will benefit from this billion heavy program and their shares are going to skyrocket. This could be the hot make money tip of the stimulus package. More about how to
make money can be read at Make Money Tip.
Liliane Waldner
Bio Box:
Liliane Waldner is a business economist. She has attended the board of several public entities companies and pension funds, some of them dealing with the financial markets. Her website is:
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