Question

Our textbook notes that Congress passed, and President Barack Obama supported, the 2009 American Recovery and Reinvestment Act, also known as the “Federal Stimulus,” in an effort to support the flagging US economy. After reviewing this section of your textbook, research the current level of the federal budget deficit. Compare this to Congressional Budget Office (CBO) projections. Given your findings, evaluate the success of the Federal Stimulus. Discuss the following questions: Did the stimulus package pump enough money into the economy to prevent a complete failure of the economic system? Would the government have reemerged from the recession without the stimulus? Is the US better or worse off, economically speaking?

Answer 1

The entire world was affected by the great economic recession during 2009 but it started way back. All the governments were in deep struggle in reviving the economy and even the world’s top economy, America was in trouble. Banks were in the verge of collapse, jobs were last and spending froze thus bringing the economy to a standstill.

The then American president Mr. Barrack Obama’s government came out with a master plan to safeguard the banks and business by pumping in more federal funding into the economy through American Recovery and Reinvestment Act of 2009 (ARRA) which was also known as the stimulus funding.

They pumped in 787 billion American Dollars which was further broken down to different sectors such as, tax rebates and cuts (288 billion), Federal contracts and grants for jobs (275 billion), Unemployment Assistance, healthcare and education (224 billion). This definitely boosted the economy and brought confidence both in the minds of the people and investors.

In my opinion, the economy would have revived even without the stimulus funding but the funding was needed to speed up the recovery and the President’s decision to implement American Recovery and Reinvestment Act of 2009 (ARRA) in order to help the economy revive was a timely and good decision. US is still the number one economy in the world.