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Stimulus Bill - Article Example

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This act is also known as the Recovery Act. In short form this act is referred to as ARRA. It was an attempt counter consequences of the recession and restore the jobs and offer…
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Stimulus Bill
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Stimulus Bill

Download file to see previous pages... it allowed the people to invest in the overall development of the society like in infrastructure, medical treatment issues, education and other basic needs of the people were addressed by this act. Further it took part in recycling of the energy too.
The Act is based on a theory of economics which is called Keynesian Macroeconomic Theory. This theory suggests that when a recession strikes, the government should be modest and generous enough to put less money into the projects which are of private nature and likely to benefit the government and the state only, and start investing more on the things which will directly give relief and benefit to the general public. According to this theory, recession is not the time to secure your business or government, but to keep the public surviving and doing all which will keep them alive, happy and motivated to work or to get back to work.
Although the Act seems to be a perfect package for the social welfare of the people, it was also criticized by some in terms of its very limited scope. They say that it covers less than one third of the spending. As it happens with every new thing presented,
The view and recommendations of the economists about the act should also be discussed in order to get a better idea about the weaknesses and strengths. Some economista like Paul Krugman, Joseph Stiglitz, Larry Summers and Martin Feldstein have reservations about this act that it has a very small vision or it is an act with limited scope which does not benefit the sufficient number of people. They suggest that it should have been designed to encompass the larger wider population. Feldstein is generally in favour of such a package but questions the directness of this act on the investment on consumer spending. He says that this act should have been more direct on addressing the unemployment and the consumer spending. According to him some revision is needed in this act to make it more effective and beneficial. Krugman also says that it ...Download file to see next pagesRead More
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