The paper "Stimulus Package" is an excellent example of an assignment on macro and microeconomics. The stimulus in simple terms can be referred to as an ‘ x’ sum of money aimed to be spent by the government for economic recovery; as witnessed by America, one of the worst economic downturns after the Great Depression in the 1930s. Fundamentally, the aim of these stimulus packages is to revamp and rejuvenate the financial structure of economy and its banking system which is stifled under the weight of decreasing credits. According to FOXNews, issuing a hefty stimulus package of $819 billion by Obama government was not considered appropriate by many in the face of such economic crises and thus, seemed wasteful.
It was akin to mortgaging future generations to overcome present crisis. It was also seen as incapable of stimulating job growths. However a lot other applauded the move. Similarly, another report by NIGHTLY BUSINESS REPORT highlights that President of Elkhart, Indiana does not acknowledge the stimulus package to be rightful at a time when unemployment has tripled; to which Mr. Obama replied that delays and procrastination would further worsen the condition.
A news report by BBC News describes the stimulus package as not an instant cure to the crises and that the government would give an account of the money spent under this package. BBC news also reports the haste of the democrats to pass the stimulus package which was easy after winning the elections. A report by CNN illustrates the speech of Mr. Obama urging to hurry the passage of bill for stimulus package which would inadvertently lead to infrastructure developments, tax benefits as well as benefits to college students along with reiterating government accountability.
Nevertheless, the article also mentions a viewpoint which condemns the idea of borrowing and spending instead of saving money during these hard times. It is very important to consider the pros and cons of going ahead with a huge amount of stimulus package. Stimulus Package has been well criticized as wasteful expenditure, that the benefits of tax cuts would largely go to already economically sound class of people, that the money might be used for imports and be useless for stimulating the domestic economy and instead ship the money out of home country but, what has not been considered is that it will provide huge tax rebates to individuals of middle class, low income retirees and military men, it will help the college students with educational fund, stimulate spending and create competitive business environment and not to forget the mobilization of financial sector which has been majorly affected.
With so much to gain, the onus lies on the control body which is The Government. The efficiency with which they execute the package and keep an account of the spending incurred under it so as to monitor and check the process is vital because once the package is passed and becomes a law, it would yield gradual results and a long term view of maintaining and following up of its progress is essential.
The risks of this project being a failure are very high and so are the benefits. It cannot be argued whether or not a stimulus package as high as these would stand the test.
The bone of contention is whether the government in place would show competence enough to handle its implementation and execution. World over, governments are trying to re-construct their economies. An important consideration for them would be to try and spend more on state construction projects like schools, highways, and bridges etc. which would help on a local level and provide employment to the poor worker class who have lost jobs due to the subprime crisis. Stimulus package is a tool and its correct application would determine its success.