How will the economic stimulus plan affect the American people?

Answer 1

This is more of an opinion question, but I will do my best to provide both sides of the argument. Personally, I don't think it will work, but like I said, that's an opinion.

Yes: It gives money to people/businesses, which businesses will use to hire new workers and people will spend at businesses, giving businesses more money to hire new workers.

No: The money going to people doesn't just magically appear. It is printed in massive quantities and lowers the value of the dollar. It also increases our national debt. Both of these are very bad for a national economy. In addition, any smart person getting money isn't going to just go spend it all. They are going to invest it, pay off debt with it, or save it. Businesses would do the same thing.

Answer 2

The average wage earner will see a $13 per week pay increase. Some people who are "under water" in their mortgage might experience some government aid. Other than that, the effects have yet to be seen.

Answer 3

No. It already failed based on Obama's own criterion. The Obama administration promised to keep the unemployment rate below 8% if his stimulus plan was passed. Since the plan was passed we have not had a single month of unemp;loyment below 9.5%. 4.3 Million Americans have lost their jobs despite Obama's promise to create 3 million jobs with the plan. It and he have a collossal failure. In the election of 2008 America fell for yet another slick politician with the gift of gab - or in his case the gift of being able to read a teleprompter.

Answer 4

Yes and no. The Obama Administration's Chairwoman of the Council of Economic Advisers, Christina Romer, announced that when passed, the stimulus plan would not allow the unemployment rate to go above 8%. But that rate was frozen above 9.5% for 14 months - each of them after the stimulus plan was passed. On the other hand, while the president's critics say it was a failure, the president's supporters and a number of economists from both parties say the problem was the stimulus needed to be larger. However, it did in fact save or help to create thousands of jobs. Several fact-checking websites have debunked the myth that the stimulus did nothing. By most neutral accounts, it seems to have put the economy on a better path, even if it did not succeed in dramatically lowering unemployment. I enclose a link to the non-partisan site, factcheck.org which evaluated the stimulus and its results.

Answer 5

Economic history shows that the question as to whether Keynesian stimulus works was settled a long time ago. Stimulus has been used many times since World War II and worked to reverse economic recessions. In a recession the economy is shrinking because too many individuals and businesses stop spending or investing -- and they do it at the same time because something made them lose confidence in the economy. Rather than spend, they save or pay debts or sell stocks and bonds and begin hoarding cash instead. There may be a run on bank deposits which can cause bank failures which is what drove Lehman Bros into bankruptcy. The fall in consumer spending eventually drives the demand for goods and services down. Unemployment begins to rises because the expenditure of Ms. A ends up being the wage of Mr. B. So when too many folks stop spending, businesses sell less, their profits decline and they lay off workers. The idea behind Keynesian stimulus is that recessions and depressions are real crises that cause widespread human suffering and damage to the economy. The culprit is the lack of demand and investment. Keynes argued that government has a responsibility to increase demand by spending on things like building new infrastructure which creates jobs and pays wages workers will spend. This will build public confidence and help normal spending to resume. Some argue that cutting tax cuts is a better way to revive the economy. Keynes disagreed arguing that in a recession people prefer to keep cash (known as a liquidity preference). So the money people get from a tax cuts is unlikely be spent and probably will be saved instead adding no stimulative effect. On the other hand, stimulus spending creates jobs that pay a wage which a worker is more likely to spend than say, a millionaire, because the worker must purchase essentials to survive. Many economists believe that Obama's stimulus plan has worked and would have been even more effective had it been larger.

Answer 6

Unfortunately - no.

Obama's stimulus plan was based on the theory that government spending can boost the TOTAL economic activity of a nation. Unfortunately history has proven this theory to be false. It goes back to what economists call "the 'seen' and the 'unseen'". The famous French economist Frederic Bastiat explains it like this.

"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visibleeffect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

A hundred thousand men, costing the taxpayers a hundred million francs, live as well and provide as good a living for their suppliers as a hundred million francs will allow: that is what is seen.

But a hundred million francs, coming from the pockets of the taxpayers, ceases to provide a living for these taxpayers and their suppliers, to the extent of a hundred million francs: that is what is not seen. Calculate, figure, and tell me where there is any profit for the mass of the people."

It is important to remember that ALL government spending comes from taking money from the private sector (either through taxes or government-produced inflation).

REAL economic growth MUST come from the private sector because the wealth of a nation comes from voluntary exchanges which give people what they ACTUALLY want (putting it another way, money is not wealth...goods and services are wealth). While government spending may be necessary to deal with criminals and invading armies and conflicts between citizens over property rights (things which involve the use of FORCE), government spending that competes with the private sector (ex: government schools) produce inefficient monopolies that are not reflective of the actual wants and needs of individuals.

The most dramatic example that government spending does NOT improve the OVERALL economy was WW2. Government spending exploded. People were working...they had jobs. But the WEALTH of the nation DROPPED. People did NOT have they things they wanted. They did NOT have the cars, food, housing that they desired. Most people assume that the war was NECESSARY. But that is a very DIFFERENT question than "did the war increase the wealth of the nation?". If WW2 had actually GROWN the economy then we should have CONTINUED to produce tanks, keep millions of men in uniform, continued to produce bombs...and the economy would grow even after the war. Of course that would be no different than having government workers dig ditches and fill them back up in order to create "jobs". And at the end of WW2...many of the airplanes, ship and tanks ended up as scrap.

Note that in theory, a government might stimulate the economy by providing startup funds to an industry in the same way banks do. Unfortunately the reality is that banks usually make their decisions on lending based on an assessment of risk and potential returns on their loan. Governments make their decisions on such "stimulus" funding based on political considerations (rather than economics). A review of how the stimulus funds were allocated and distributed under the Obama stimulus plan drives home this point and helps explain the failure of the stimulus plan.

Answer 7

No not at this time July 18 2010 06:48 am no stimulus package available for the individual taxpayer.

Answer 8

Surely