Involvement of ARRA in the Economy Seven years ago, when Obama first entered the office as a president, he made a promise to the people of the United States. This promise was called the American Recovery and Reinvestment Act (ARRA) also known as the stimulus, which had $787 billion bill intended to stimulate the economy(Umhoefer). This massive budget program enacted by Mr. Obama, a democrat, faced its critics and the republicans, but did it accomplish/improve the economy in the United States that was situated as a result of 2008 house market crash? If one goes back to look at the results, he/she can find changes in the country’s infrastructure and the economic growth. In order to reflect the economic challenges in 2008 such as the increase …show more content…
The governments prior to Obama had spent their money on various programs that would strengthen the country’s infrastructure and provide jobs for the unemployed. Although this was true, it had increased the budget deficits largely. Additionally, budget deficits are important as gov’t pays billions of dollars in interests for the borrowal. There were also administrations wasting money on such constructions like duck pond. As Robert Pole, who had advised the gov’t on transportation issues, has noted “[a] stimulus project and an earmark are dangerously similar. Sometimes the government will waste its resources on bridges that truckers won’t use”(“Deficit Spending”). Opponents of budget deficits feared that if the government continues to spend like this, then that would trigger inflation where the prices rise faster than people’s wages. This substantial effect may lead to a recession. So, Obama had to be careful that the money goes to the correct place and correct cause. During his administration, the deficits decreased and yet the money used helped a lot of serviceable organizations. As part of the stimulus program, he cut taxes for people who make less than $250,000 a year and increased taxes for people who make more than that. On top of that, the stimulus has created a pathway to establish healthy United …show more content…
Even facing a lot of criticism from non-budget deficit supporters, Obama still ended up expending large amounts of money. The only reason for that is stated in the Keynesian economics. It argues that gov’t should spend money in such cases like depression or recession, even if it incurs large budget deficits. Before Obama’s arrival as a president, the economy was slightly into a recession caused by a crash in the housing market that led to a complete financial crisis in 2008(“Deficit Spending”). Eventually, Obama, as soon as he took office, needed to do something to resolve this economic problem. Consequently, he followed Keynes’ economic theory. As explained before, he also satisfied the opponents of this program by decreasing wasteful spending. Later, it turned out that the stimulus “raised the nation’s economic output by 2-3% from 2009 to 2011”(Umhoefer). This means that the total value of all goods and services produced in U.S increased. Usually, this happens when companies/businesses offer jobs to tons of people and the production values automatically rise as a
...vailable for stimulus programs to boost the economy out of the 2008 financial crisis. This caused fewer jobs to be created, which meant less tax revenue and more debt.
(Klein) President Roosevelt took many of these ideas and put money into public works to give people jobs, as well as giving subsidies to farms to keep food supplies constant and accessible. Advocates of this approach claim it to have been successful, and many of the programs that were set up during the New Deal softened the blow of the 2009 recession decades later. Though these reforms did little to stop the recession from occurring in the first place, they did allow people the ability to weather the storm for a few years while the economy stabilized. Removing them would only leave open the people who would be hurt the most in another
All of this is true. Roosevelt’s deficit spending, provoked by the English economist John Maynard Keynes, did add to the already high national debt while his programs did not solve the record-high unemployment rate. This “enormous outpouring of federal money for human relief and immense sums for public-works projects [that] started to flow to all points of the compass” and nearly doubled the nation’s debt also brought about many changes that were, in a large sense, revolutionary (Document C).... ... middle of paper ...
The War on Terror reduced funds for stimulus programs to boost the country out of the 2008 financial crisis. Fewer careers were created, which meant less tax revenue, further increasing the
Government spending also help produce economic growth as well. It did this with things like defenses contracts, which were important because we were in the early stages of the Cold War and the ensuing arms race had begun. This, just like during the war, would keep factories producing military supplies. They government also invested in the interstate/highway system. This in turn sparked an increase in the automotive industry (cars are now being owned in a higher volume), and the trucking industry. Other industries that are directly related to these industries as well as the building of roads saw an increase as well. These include the oil, concrete, and tire industries. All this surge in industry would directly help produce a stronger economy in America. The housing industry also sees a surge because of the
The government used the New Deal as a foundation to build new welfare programs. Medicaid and Medicare were created to help poor and elderly people with their medical costs. Support for welfare programs has declined from the 1980’s to the present day, even with efforts to try and improve support. Since the New Deal and the Great Society programs, the support for the welfare programs has been declining. President George W. Bush signed into law the No Child Left Behind (NCLB) bill to try and increase the support for welfare programs by helping low-income children.
The American Recovery and Reinvestment Act was signed into law by President Obama on February 21, 2009. The law had three major goals which were all aimed at stimulating a sluggish US economy. The first goal was to create new jobs and save existing ones by tax credits for hiring new employees. The second goal was to spur economic activity and investment in long term growth by increasing the amount of business asset that could be acquired by companies while allowing for immediate deductions for the cost of the assets as well as numerous tax credits for individuals and businesses. The third goal was to foster unprecedented levels of accountability and transparency in government spending by requiring recipients of recovery act funds to post acknowledgements on the Recovery.gov website.
Not only did Carter and Reagan Administrations help cause the Recession, President Clinton helped. “Clinton then established official government poli...
As you can see, Roosevelt began to bring the people out of the depression and that resulted in some astonishing growth numbers. (Roosevelt's average growth of 5.2 percent during the Great Depression is even higher than Reagan's 3.7 percent growth during his Seven Fat Years ) When 1936 saw a phenomenal record of 14 percent growth, Roosevelt eased back on the deficit spending, overly worried about balancing the budget. Between 1940 and 1945, the Growth Deficit Product nearly doubled in size, from $832 billion to $1,559 billion in constant 87 dollars. And this occurred as deficit spending soared, to levels Keynes had earlier and unsuccessfully recommended to Roosevelt
When a company builds a toll road and turns a profit, then the government funds a public road; the toll road becomes less profitable and the private sector is less willing to provide that service. I think currently the best reason to increase deficit spending would be in infrastructure. We hear all the time that our bridges are crumbling, and are far past their life expectancy. We also could use some significant upgrades to our power grid, as well as our internet networks, although those are both controlled solely by private firms.
Wildlife tourism has become a particularly popular trend over the years. Riding on elephants, taking pictures with lions, swimming with dolphins are only a few of the adventurous and thrilling activities that wildlife tourism provides. Even my own school is planning a trip to South Africa to participate in several of the enthralling ventures.
Obama has striven to make it easy and affordable to provide healthcare for people in need of it. The United States changed the American health care system. Obama’s main purpose was to provide the Americans with health care that they can afford and also health insurance. Reducing the health care spending is essentially the goal he was going for in the United States. The Obama Healthcare was signed into law on March 23, 2010. It provided benefits and protection that comes along with the healthcare and the setup with health insurance where it can be easily purchased. The Obama care helps most small businesses and the economy because it’s an affordable program.
The key challenge that US policy must address the reduction of greenhouse gases while growing the economy. Recovery Act spending acted as a stimulus package to revive an economy heavily affected by the GFC(Aldy, 2012 p 3). While the recovery funds were aimed at stimulating the economy, President Obama stressed the importance of the development of renewable energies in his first State of the Union address (Roberts, Lassiter, & Nanda, 2010 p 3).
...avoiding even deeper collapse of the global GDP and of employment. The government also created the Troubled Asset Relief Program (TARP), for the establishment and administration of the treasury fund, in an effort to control the ongoing crisis.
Polanyi says, regarding the economy, “the economic process….is embedded in noneconomic institutions.” An embedded economy is an economy in which economic activities occur such as, production and distribution; however other activities, which are not economic also occur. Activities such as forming friendships or helping other people may be happening, but it might just seem like the normal economic process because it is an embedded economy.