After Obama administration took charge of the remaking America there first priortity was to get back the economy on the right path and after one month on the Presidential seat Mr Obama has passed the stimulus bill of $ 789 Billion on 14, feb, 2009.
Lets see how the Obama administration has planned to distribute this amount
As we can see in the above chart most of the amount will be spent on strengthening the infrastructure as when there will be more construction of houses, bridges,schools etc then there will be automatic demand of steel and other building related tools thus help in balancing demand and supply.
So lets see how the govt wants to strengthen the infrastructure:
1) Around $ 140 billion will be construction spending
2) There is also some question about whether this will be new work or will simply fulfill the ongoing operating and capital spending requirements of some states. It is likely to be a mix of the two and, therefore, the full impact will be partially diminished. For their part, however, it has to be recognized that many of the states are desperate for funds. Their revenues are falling dramatically and balanced budget mandates make it extremely difficult for them to get extricated from this mess.
3) Around $ 49.3 billion will be spent on transportation infrastructure which will include building new bridges,high speed rail corridors, assistance to ship yards etc.
4) Around 30 Billion will be spent on constructing housing facilities ,schools, developing rural communities facilities.
5) Another $30 billion will be spent on energy and technology
The extra money for schools makes sense on so many levels. Endowment funds have been ravaged by the decline in equity price on the major stock markets. Staying enrolled in a community college or a university is a fine way to pass the time until the economy improves again, especially since gaining more skills and knowledge will be essential in the internationally competitive workplace. And capital investments on educational facilities will showcase “green” jobs in fuel efficiency and life-cycle extensions.
The bottom line, however, is that probably most of the new construction will come in the area of civil and heavy engineering work. These projects are already subject to government appropriations for spending anyway. For this reason, the systems are in place to get this kind of work underway quickly. Roads, highways, water treatment projects, water and energy pipeline work and alternative energy projects (i.e., transmission lines to remote solar and wind farm sites) will all see more government money. And this will be spread across the country.
Deutsche bank has said that this bill could generate 15m tones of steel demand over the next three years and its also predicted that estimated $146bn in infrastructure spending called for under the legislation will represent 5m t/year of new demand – roughly an additional 4% of “normalized” US consumption – in each of the next three years.
Lets hope the above said plans are executed on time so that the economy comes back on track.
You can also read the full stimulus bill on http://www.recovery.gov