Stimulus Spending Debates

1. Stimulus Spending

Stimulus Spending Debates

History and Debate of Stimulus Spending

On February 13, 2009 the American Recovery and Investment Act of 2009 was passed by the United States Congress. The act is also known as President Obama's stimulus package and was only approved by three Republicans in all of Congress. The package, composed of $787 billion in tax reductions and expenditures for education, energy, infrastructure, health care and many other projects, was created to help get the U.S. economy out of the recession by creating several million jobs and replacing money in the economy. Read on to learn more about the major ups and downs to the stimulus package.

Stimulus Spending Debate Pros

The biggest pro for the stimulus package is, of course, that if it works it can pull the U.S. economy out of a terrible recession. The stimulus package has the ability to upstart the economy and provide millions of jobs. This would stop the ever-increasing unemployment rate. Additionally, the stimulus package has the backing of economic historians, who argue that the Keynesian-style spending inherent in the package has shown previously great success in ending the Great Depression and propelling economic growth during the 1950's and 1960's.

There are also a number of smaller, more specific pros that come out of the stimulus package. First, the package calls for a great deal of repair to U.S. infrastructure. The repairs are certainly needed and affect roads, power, bridges, airports, sewage systems and more. Next, the package provides a great deal of aid to school districts. The package works to expand public transportation, with funds dedicated to a high-speed rail system. There are increased unemployment benefits. The package increases food assistance for Americans with low-income and increases medical coverage for military members, families and veterans.

Criticisms of the Stimulus Spending Debate

There are a great deal of critics of the stimulus spending debate as well. Those who criticize the package consider a number of cons. First, the money funding the package must come from outside sources, increasing the national deficit. Economists predict that within a few years the hole in the economy will triple the amount spent in the package, so the package is potentially not nearly enough to do anything worthwhile.

Among the biggest criticisms of the bill by those who lean right politically is about the nature of government involvement in economics itself. Many Republicans feel that the federal government was already too large prior to this crisis. They objected to the stimulus on the grounds that the federal government should get reduced in size, scope and responsibility. They argue that this government contraction would create breathing space for the economy to correct and revive itself.