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Stimulus Package To Revive The Economy

1497 words - 6 pages

In December 2007, caused by the housing bubble, what is known as the Great Recession began (“The Great Recession”). Prior to this, people kept buying houses with high risk loans, because their mortgage-backed securities were technically making profits when the house values increased; however, when the house values started to decrease, those securities became worthless, thus people were not able to pay for the house—many people had their house confiscated. As a result of this wealth loss, consumer spending decreased sharply and many banks collapsed. The U.S. government tried to combat this issue, but many of the fiscal policies they had created were controversial because of their interference in the economy. One debate sparked on whether the government should spend its money to stimulate the economy by cutting taxes and creating jobs. While it is argued that the government should have not played excessive role in the economy, implementing the American Recovery and Reinvestment Act was clearly the better option because it prevented the worst-case scenario of economic failure—one like the Great Depression—that could have occurred otherwise without it.
The American Recovery and Reinvestment Act, or ARRA, also known as the stimulus package, was signed into law by President Barack Obama with a primary goal to combat the economic downturn. The measures are worth $787 billion, which included tax reliefs, expansion of unemployment benefits, and other social welfare provisions and domestic spending in education, health care, and infrastructure, including the energy sector (“About ARRA”). In the voting process, the bill was approved first in the House then in the Senate; no one from Republicans voted for the bill in the House, and no Democrats voted against the bill in the Senate, proving that the bill was largely supported by Democrats but was strongly opposed by Republicans (“About ARRA”).
The critics of ARRA point out how it did not accomplish the goals to an extent which Obama initially intended, and that it only put the country into more trouble than without it. They argue that unemployment rate, shovel-ready infrastructure construction projects, poverty number, green-economy jobs, and hybrid car production were all not at the projected level (Reince). One of the biggest problems that contributed, is that the amount of the money spent was “too small” and that it was providing money for everything—money was spent “from ailing infrastructure like bridges and rails to invasive species like Asian carp and Russian olive trees” (“How the $800B”). Stimulus package creates programs that are unnecessary and wasteful, for its primary goal is to put the American people to work. Republicans criticize that such economic measures run the country into large deficits, having severe effects on the economy in the long term such as a substantial increase in inflation (“Deficit Spending”). Overall, Republicans believe that the program was too small in scale, and its...

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