BLOGS
Home arrow Blog arrow Will the American Recovery and Investment Act get the economy back on track?
Will the American Recovery and Investment Act get the economy back on track?
Thursday, 05 March 2009

In late 2008, former President Bush persuaded Congress to approve a $700 billion bank bailout plan to prevent a massive bank failure and to head off a pending economic crisis. Yet, despite the bailout, the credit market remained frozen, banks and the housing market remained in crisis, and the economy continued to decline. The unemployment rate, which was under 5 percent at the beginning of 2008, was over 7 percent by the end of 2008 and has continued to rise during early 2009. Therefore, President Obama persuaded Congress to pass an economic stimulus package designed to stimulate demand in the economy.


There are three parts to the stimulus program:

· $281 billion in tax cuts;

· $308 billion in a wide range of spending programs; and

· $198 billion for programs such as unemployment assistance, Social Security benefits and added money for states to help with Medicaid for low-income and disabled Americans.

The plan was approved by nearly all Democrats in the Congress but without any Republican support in the House and the support of only three Republicans in the Senate. The $308 billion in spending programs includes funding of energy programs (primarily alternative energy and energy conservation), health information technology, science and technology, student higher education grants, other education funding, and traditional infrastructure.

Pro:

· These programs will provide jobs and money where they are needed most and get the middle class and the economy moving again.

· While these programs have short-term costs, in the long-term, investments in energy, science, health care, and education will yield positive returns on investment; the investment in infrastructure meets a public safety need, the investment in energy will improve the environment, and the investment in healthcare will improve the nation’s health.

· A cut in the capital gains tax, which is a key part of the opposition’s proposal, will primarily benefit the wealthy. According to the Urban Institute, 72% of the benefits of a capital gains reduction go to those earning over $1,000,000 a year.

· The effect of the spending plan on the deficit did not appear to be a major concern of the opposition while they increased military spending during the Bush years.

Con:

· The problem is full of pet projects that won’t help get the economy out of the recession;

· Tax cuts alone will provide the best incentives for the economy.

· The stimulus plan dramatically increases the already huge deficit.

· The plan, according to Ronald Utt of the Heritage Foundation, is that 93 percent of the spending plans pay for "ineffective federal programs and state governments" and "represents a massive and unprecedented peacetime transfer of wealth" from taxpayers to the government.

Sources: 

"Is the 2009 US economic stimulus package a good plan to combat recession." Debatepedia website at http://wiki.idebate.org/index.php/Debate:_2009_US_economic_stimulus.

Clemmitt, Marcia. "Public-Works Projects: Do They Stimulate the Economy. CQ Researcher – Volume 19, Issue 7. CQ Press, February 20, 2009.

Government Stimulus Website - http://www.recovery.gov/

Stout, David and Andrew Edmonds. "$1.2 Trillion Deficit Forecast as Obama Weighs Options." New York Times, January 7, 2009. Accessed at http://www.nytimes.com/2009/01/08/business/economy/08deficit.html?_r=3&scp=5&sq=troubled%20asset%20relief%20program&st=cse.

http://www.nytimes.com/2009/02/25/us/politics/25obama.html?fta=y

CNN - http://edition.cnn.com/2009/POLITICS/02/13/stimulus/index.html

Washington Post - http://www.washingtonpost.com/wp-dyn/content/article/2009/01/05/AR2009010502752.html

Time - http://www.time.com/time/nation/article/0,8599,1870575,00.html

Fox News - http://www.foxnews.com/politics/2009/01/28/house-vote-obamas-economic-stimulus-plan/
Set as favorite
Bookmark
Email This
Comments (7)add comment

Stimulus Bill said:

This bill will benefit our economy and help get our country on the right track again. Even though it won't pull us out of the recession completely, it can't hurt.
 
report abuse
vote down
vote up
April 14, 2009
Votes: +0

Jessica Fletcher said:

So, i think this plan is just aweful. Especialy the part that gives all that money to social security and unemployment. It is not OUR job to take care of those lazy people who sit on their couch all day and don't get a job. PLUS, we should be cutting back on spending, not increasing it. We should neutralize our debt BEFORE we start to make multi-billion dollar decisions.
 
report abuse
vote down
vote up
April 17, 2009
Votes: +1

Stimulus Bill said:

First of all, its not as easy as you might think to balance the national budget. We have accumulated trillions of dollars in debt from our pointless war in Iraq, our war in Afghanistan, and several other things that George Bush and his administration did. So, where do you propose we get the money to balance our budget? Taxes? Cutting out more government programs? I agree that balancing our budget is extremely important, but its not something that can be done overnight...or even in one or two presidential terms.
Also, if you think the stimulus bill isn't the right way to go, what do you propose President Obama does instead? Sit around and watch our economy fail? He has to do something. And while I might not agree with everything in the bill, at least our President and congress are trying to put our economy back on the right track.
 
report abuse
vote down
vote up
April 18, 2009
Votes: +0

Jessica Fletcher said:

Its true that at least obama is doing something. and we do need to get our economy back on track, but i just dont agree with where the money is going. we are funding ineffective government programs.
 
report abuse
vote down
vote up
April 18, 2009
Votes: +0

Stimulus Bill said:

True. I don't support some of the tax cuts or pork that's in the bill either. Hopefully our government can find more effective ways in the future of getting our economy back on track than spending close to a trillion dollars. But the bill has been passed and is in effect, so we might as well accept it even if we don't approve of it.
 
report abuse
vote down
vote up
April 18, 2009
Votes: +2

Jessica Fletcher said:

that is true. it has been passed and i hope for the best even though i feel we can do better :D
 
report abuse
vote down
vote up
April 19, 2009
Votes: -2

Jacob smith said:

Yes its passed and now the something better from the past. please check http://www.mcseexams.com for your success.
 
report abuse
vote down
vote up
July 30, 2009
Votes: +0

Write comment
smaller | bigger

security image
Write the displayed characters


busy