Can the 2030 Challenge Stimulus Plan Save the Economy From the Worst Crisis in 75 Years?

Can the 2030 Challenge Stimulus Plan Save the Economy from the Worst Crisis in 75 Years?

This calendar year, the 30 blue chip stocks of the Dow Jones Industrial Average have lost 47 percent of their value. Americans have seen their 401(k) retirement plans shrink by 30 percent or more totaling a loss of more than $2 trillion in savings. Since they peaked in April 2007, home prices are down nationwide 8.8 percent and in California and Nevada is down almost 21 percent. More than 2.5 million jobs have been lost this year through the end of November, and on Wednesday the Labor Department reported 586,000 new requests for jobless benefits in the week that ended Dec. 20th, the highest level since 1982. Many economists think that the unemployment rate may peak at 9 percent in 2009.

With all of this terrible economic news, Congress and the Obama transistion team are desperate to find solutions to this economic disaster to include in a new stimulus package which they plan to legislate as soon as Congress reconvenes in January. And now, just when America needs it most, a stimulus proposal called the 2030 Challenge [1] Stimulus Plan is actively being considered by Congress and the Obama Transition Team.

Endorsed by the American Institute of Architects, the U.S. Conference of Mayors, and by cities and private firms around the world, the 2030 Challenge Stimulus Plan was created by architect Ed Mazria The plan begins with a federal government created mortgage buy-down program administered by Fannie Mae and Freddie Mac and an accelerated-depreciation program for commercial buildings. If you are a homeowner or building owner, you are able to reduce the mortgage rate on the property from 2 to 4% by improving the energy efficiency of the building or house which in-turn increases the value of the property. The Fed will agree to pay the 2 to 4% interest difference allowing you the owner, to save hundreds of dollars on a typical monthly home mortgage plus hundreds of dollars more in reduced energy bills for as long as you own the property.

Because the Fed Bank has already lowered interbank lending rates and the current home mortgage rate is about 4 ½ – 5 ½ % on a 30 year conventional mortgage, this program significantly reduces the cost of housing for a homeowner. The plan prevents mortgage foreclosures and lower housing values while increasing disposable income and providing extra money for the homeowner to immediatley spend on other expenses which further stimulate the economy.

Ok, you say, I understand how this stimulus plan will get at what many call the root cause of the recession – the loss of residential housing value and mortgage foreclosures – but if I am a cash strapped homeowner how do I pay for the cost to remodel to improve energy efficiency?

Existing tax credits would take care of about $10,000 of that cost. The rest would be added to the principle of the existing mortgage. But, if the interest rate is reduced 2 – 4% on an average mortgage, the monthly payment is also reduced by an expected $200 to $400. In addition another $100 – $200 can be expected in reduced energy costs per month. The value of your home rises, the mortgage payment decreases, and you have more disposable income.

How does the proposed stimulus plan create jobs?

The 2030 Challenge Stimulus Plan creates jobs through the building remodeling done to make houses and commercial buildings more energy efficient and also with the increased consumer spending resulting from increased disposable income. The plan is expected to create 3.75 million direct jobs in the building sector of the economy, as well as 4.34 million indirect and induced jobs. Another 350,000 jobs will be created from increased consumer spending due to reduced mortgage payments. But the real long-term impact to the economy by the 2030 Challenge Stimulus Plan is the expected jump-start to the creation of a new $1.6 trillion renovation market for green energy products.

And how does the governent recoup its original investment for the taxpayer?

When the demand for energy efficiency upgrades creates millions of new jobs, the government recoups its investment in the mortgage buy-down program from the income tax collected from the newly employed. And by the way – greenhouse gas emissions go down dramatically because U.S. buildings use more energy than any industry sector – about 48 percent of the total energy use in America.

[1] Kershner, K. and Mazria, E., “The 2030 Blueprint: Solving Climate Change Saves Billions,” 2030, Inc. / Architecture 2030,

http://www.architecture2030.org/pdfs/2030Blueprint.pdf.