This blog is for discussing issues in our complex global economy.
Some “normative” economics:
Stimulus and jobs: What the fight’s all about
I agree that the American Recovery and Reinvestment Act (ARRA) has created numerous jobs. Just looking around the bay area, the city of Berkeley has completely redone the sewer lines and repaved University Ave. all under the ARRA. Every time I drive through I see the billboard that says “Funded by the American Recovery and Reinvestment Act: Putting America to Work.” But I also see where we still have a long way to go in regards to reducing our 10% unemployment rate back down to around the 7% it was, or even less.
As for the critics that have said that the stimulus money is being wasted on pointless projects, I know recently, Sen. John McCain of Arizon targeted the Napa Flood Project as one of those “wasteful” stimulus projects. In fact, the Napa Flood Project will be featured on CNN Thursday at 7pm in regards to the comments that Sen. McCain made. I think that it is going to take more time to truely see the outcomes of the stimulus; much more that people are demanding.
I feel that the stimulus money is great for addvancement in the economy, but has not created a stable relaible income. I have the feeling that the stimulus will most likely not be effective in the long term. Yes, the unempolyment rate has dropped, but I stimulus money has mostly helped people keep there jobs, instead of creating new ones.
While I believe the American Recovery and Reinvestment Act is a good idea, and has created jobs; I wonder at what cost? Didn’t we spend our way in to the recession? Can we spend our way out of the recession? How is this feasible? Look at our deficit and how it is only expected to grow with the way the government is printing and handing out money! I think that the American Recovery and Reinvestment Act needs to address small businesses, which make up 85%-90% + of our economy. We need to started lending to the small businesses so they can grow, and hire people, who will in turn actually have money to spend!
I feel that the American Recovery and Reinvestment Act will only take time to play. If we didn’t have it where would the economy by? Even if it is not creating jobs it has helped people keep the jobs that they had. During this economic down turn we’ve see the big companies turn into nothing so this stimilus money should be put into the the smaller buiness because these small buinesses with be the new generation of buisness when the economy does come back, because all the big guys will have gone away because they spent all their money trying to stay afloat in this downturned economy. The Act will pay out, but we will just have to wait it out for while, nothing will happen in the snap of a finger in this economy.
I see where the administration’s decisions have kept unemployment from going any lower and I agree that spending the stimulus money on infrastructure of our country is a good thing, but I do see other’s points on the fact that we are borrowing to pay for this recession. I am not sure how that is common sense or even good decision making. It feels like this stimulus is just prolonging the inevitable, and quite possibly funding a bigger fall. I really don’t know much about how everything is intertwined and once I think it makes sense, someone throws in another idea to think about. Time will tell.
I forget who it was but I read this book that said the key to saving an economy that is in a recession is by increasing government spending. I think the reason they do this is to increase the amount of money in the money market. If there is more money on the market, more people are going to be able to get that money through their job or how ever that money is dispensed. It seems very small in the whole scheme of things but I think it will eventually make the difference. I heard an ad for a new governor saying that she wanted to cut down government spending which really mean cut down on jobs. When the job market is already suffering so much I hardly doubt that cutting government funds is going to help that problem.
I never though a stimulus package was ever very affective because of how people spend it. When the economy is so down and people are in debt, they will only use that money to pay off their debts. This does not allow the money to properly circulate therefore making the stimulus pointless. Also, it is a reason for people to postpone going to look for a job.
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