Essay on The Government Stimulus - 1697 Words

In these current economic times, people have lost jobs. People have lost faith in the economy since the worth of their money keeps falling. Businesses are failing left and right because of the lack of confidence in the system. Banks have folded because of the amount of people who are unable to pay their loans, leaving the banks without funds. The auto industry is failing as people cannot afford the new cars being produced by Detroit. Confidence in the economic system of the United States is very low. How can the country recover from this economic recession? Some economists would say that the government should step in to save the day by pumping funds into the system. President Obama signed a massive stimulus bill in an attempt to turn the†¦show more content†¦See Figure 1 To help gain support for the bill, President Obama made statements about how the bill would help the economy. In his January 10th radio address, President-elect Obama said: †¦I asked my nominee for chair of the Council of Economic Advisers, Dr. Christina Romer, and the vice president-elects chief economic adviser, Dr. Jared Bernstein , to conduct a rigorous analysis of this plan and come up with projections of how many jobs it will create—and what kind of jobs they will be†¦ The report confirms that our plan will likely save or create 3 to 4 million jobs†¦ The jobs we create will be in businesses large and small across a wide range of industries. And theyll be the kind of jobs that dont just put people to work in the short term, but position our economy to lead the world in the long-term†¦ The jobs being created by the House bill could cost as much as 2.5 times more than jobs created without the stimulus bill. (Grassley) The funds from the bill were to be allocated to different projects that were designed to create jobs. Part of this was a distribution of the funds to states based on how effectively they would use the funds (Chenn). In an article quoted by Chenn, Daniel Wilson says that the bill is aimed at states that are in need of funds, therefore they will spend the moneyShow MoreRelatedGovernment Intervention in the Economy: Are Monetary and Fiscal Stimulus Policies Possible Tools for Getting an Economy Out of a Recession2541 Words   |  11 PagesSubject Area: Economics Topic: Deficit Spending Essential Question: Should the government use instruments of monetary and fiscal stimulus policies to reactivate the economy? Imagine people living in parks called Bushville’s, lines for soup kitchens that go for blocks, and all across the country kids running away from home travelling on trains searching for your next meal. This is just a taste of what 2009 could have been, but thankfully, the year did not go down this way although it will be rememberedRead MoreThe Recession Of A Recession1035 Words   |  5 Pagescrisis, numerous government policies were enforced. A recession usually last 6 to 18 months and interest rate fall to stimulate the economy. During a recession, people tend not to spend, borrow, but to save money because of a fall in confidence. The government initiates an expansionary fiscal policy which involves increasing stimulus government spending and cutting taxes. However, the question is can increased stimulus spending help end the recession. The first article, â€Å"Increased Stimulus Spending CanRead MoreU.s. 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It’s intention is to keep consumer spending afloat by way of public spending or altering theRead MoreFinancial Crisis During World War II1171 Words   |  5 Pagesonset of a recession or the economy starts to slow down, the government looks to restore the economic growth through different stimulus plans. The recession of 2008 was one example. When the housing bubble burst it caused panic with quick financial fallout, à ¢â‚¬Å"the government took immediate measure to stimulate the economy back to normal and to restore confidence in the economic market† (Mitchell). Congress approved the Economic Stimulus Package in 2008 that the Bush Administration put together. â€Å"TheRead MoreJohn Maynard Keynes s Economic Theories Essay1245 Words   |  5 Pagesexpectations. When an economy is in a recession Keynes proposed that the government should buy more output, employ more people, provide more income transfers and make more money available. 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