Stimulus package forms a major platform for economies during strong periods of recession. President Barrack Obama signed into law a stimulus bill for the United Sate to shield it from the current upheavals of the global economy. The name of the bill is The American Recovery and Reinvestment Act (ARRA) of 2009. The economic bill was worth US $ 787 billion which the US government is intending to use in the year 2009 (Fox, 39-45). The President received a lot of praise as part of his trial to anchor the country from economic down turn that have wide reaching effects to the rest of the world.
2. Aims and purpose of the bill After the previous 2008 stimulus bill by the former US president George Bush which only consisted of tax rebate, it became apparent that though the economy was greatly stimulated, it was not enough and the recession was still taking head on the remaining part of the non stimulated sectors. As a result it became apparent that another larger stimulus package was necessary. Particularly this bill is intended to increase the GDP growth by 1. 4-3. 8% while raising the Jobs increase by 1-2 million (Fox, 56-57).
To effect this demand, the act will include federal tax cuts, expansion of unemployment benefits and related social welfare provisions, domestic spending in education, health care and infrastructure which includes the energy sector. The bill was highly regarded not just for being timely, but extremely relevant at a when the country was at the helm of collapse. In addition it has been described as the largest bill ever to be introduced and passed by the congress with an intention of keeping US as the direct international superpower. 3.
Legislations most important for recovery of the US economy A. i) Education Economic growth is described as an amalgamation of different factors that are strongly interlinked and highly interdependent. However, education forms a core and central post for all the other sectors of the US economy. It is considered that long term investment in education is the best item that would guarantee self reliance, professionalism, and correct managerial as well as leadership considerations. This section got US $ 90. 9 billion that was further broken down to 11 subsections of the education arm in US.
Over the years, it has become very clear that US has managed to remain at the top due to its ability to effectively articulate modern technology that carves out innovative minds which are needed in the highly advanced country. US $ 200 million is to be used in supporting college students while US $ 650 will be used in education technology. Of greater importance is the consideration and allocation of US $ 13 billion and US $ 12. 2 Billion for low income public school children and IDEA special education in the country.
This is especially important in that the middle class population in US forms the majority and therefore bound to have more effects to the economy if education to their children continues to reduce their buying power. Besides, stabilization of the education sector by increasing the teacher’s salaries and raising the Pell Grant from $ 4,731 to US $ 5,350 would strongly raise their morale necessary for effective learning processes in US. Arguably, this section of the bill should have been allocated more funds to not only act as the direct stimulant to the current problems but long term seal to the issue.
ii) Aid to low income workers, unemployed and retirees (including job training) Apparently, the main effects of the current economic upheavals are being heard from the employment platforms of the vast industries and services sector. Due to the reduced purchasing power of the people, the most immediate action people take is cutting down their immediate luxury spending followed by other auxiliary necessities. Scholars have pointed out that the most important tool for recovery is restoring the people’s purchasing power in the society.
With the people being described as the immediate outlook of the society they live in. This section was allocated a total of US $ 82. 5 billion with US $ 40 billion going to provide extended employment benefits, US $ 19. 9 being used for food stumps, US $ 3. 95 billion being used to offer job training to the people. Of greater importance was the US $ 14. 2 billion to be used in giving payment to social security recipients (Kennedy-Shaffer, 34-45). Notably, middle and low income earners form the largest population in US compared to those in the higher strata of social economy.
The ability of these people to have enough purchasing power for basic necessities acts as the major platform upon which the government’s stimulus package plan would be based on. US $ 400 million and US $ 3 billion for temporary welfare payments would seal them pending the economic recovery with time. Their shielding therefore is one of the most important steps to ensuring effective recovery in US. Arguably, the people with large numbers in a country form the basis of the country’s prosperity in that they form a ready market for the consumer goods for the local market.