What are the pros and cons of the economic stimulus package?

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One Response to “What are the pros and cons of the economic stimulus package?”

1. Jeff Z on: 2 November 2009 at 10:14 am

   The stimulus package has many different possible pros and cons depending on how you look at it:

   1) Not focused enough => currently the stimulus package is focused on giving very small tax cuts which is what Republicans prefer. Republicans believe that by cutting taxes of the middle class there will be a stronger stimulation of the economy (the middle class will spend the money saved by paying off dept or purchasing goods etc.). Furthermore, many Republicans believe that most of the money should be spent on the housing industry (where a large number of people believe the American economic crisis started).

   2) No one know where the money is going yet => President Obama, in his address, said that he knew where all the money was going. He may know where he wants it to, but where it will really goes has yet to be chose by the House and the Senate. Nancy Pelosi wants about $250 billion going to global warming related issues (making jobs). But, this is more of a long term effect because it will take time to really make these jobs and get them underway.

   3) Small to no bipartisanship (agreement between both Republicans and Democrats) => Although Obama sat down with a few key Republicans, small of what they said has really occurred. When the bill was passed, not one Republican in the House voted for it and only a few did in the Senate. The most liberal people have only truly drafted the bill at this point. A lot has yet to be done.

   4) Make or break for Obama => Truly, this bill could define Obama’s presidency. If the bill fails, then Obama will probably not be reelected and in 2 years Republicans will again be the majority in Congress. But, should the package work, the Democrats can expect to control Congress for the next 8-10 years, possibly.

   5) Middle class => At the moment, it looks like a lot of benefits from the bill will go towards the middle class. Most of the stimulus money and such will be theirs (I reckon $1000 is what is being talked about now?)

   6) Housing => Although it is not directly focused towards the housing market, there will still be more help towards mortgages (7.5% to 15%)

   7) Job creation => Again, jobs will be made no doubt, there are over 4 million people out of work. But, this is a long term solution.

   Don’t get me incorrect, this stimulus package will defiantly help, but honestly a lot of it is only theory. Before the Fantastic Depress America was about 99% free market economy which meant that there was next to no government involvement in the economy. No matter what, the economy WILL fix itself eventually, but it will take time. It took about 10 years for the Fantastic Depression to be solved – but we are no where near that. This is a world economic crisis, 1 trillion dollars will not fix the world, it can only improve it. Watch the stock market, it’s a excellent indicator if it is working.