The Truth About the Stimulus - Rescuing the Economy

http://www.americanprogress.org/issues/2009/01/recovery_reinvestment101.html

Heather Boushey of the Center for American Progress debunks some of the myths and falsehoods making the rounds of talk radio & the cable news programs on the stimulus bill.

This recession has the potential to be deeper and more protracted than most other recessions. The Federal Reserve can normally encourage economic activity by lowering the cost of borrowing, but these tools are not as effective as they are in more typical recessions because of the crisis facing the financial sector.

The Federal Reserve has already used up its most common ammunition to boost the economy—the Federal Funds Rate. It lowered the Federal Funds Rate to about zero percent in December 2008 from 5.25 percent in August 2007. Even so, economists are forecasting that economic growth will continue to be negative in 2009, and the end of the economic downturn is nowhere in sight.

What’s more, U.S. families began this recession with less to fall back on than in prior recessions because of existing economic weaknesses. Income growth had been weak, and Americans had more debt and fewer assets than at the beginning of prior recessions. Since consumers make up over 70 percent of the U.S. economy, the weakness of family finances will likely hamper the economy’s ability to recover quickly.
Why does a stimulus and recovery plan help?

The recovery and reinvestment package is designed to break the cycle of job loss and economic decline. An economy suffering from lack of demand needs a jump-start. The stimulus allows the government to step in and create demand by making purchases itself; it directly puts people back to work and gets money into people’s pockets so they can spend again. Businesses begin, in turn, to hire and make investments as they regain confidence that there is a market for what they produce. The downward spiral becomes an upward spiral.
What are the criteria for an effective stimulus?

An economic recovery package should be ...

Category:

News & Politics

Tags:

• american
• bank
• cap
• congress
• deficit
• economy
• limbaugh
• obama
• pork
• progress
• recession
• seeprogress
• stimulus
• tarp
• tax

[artyfarty3]

Ha Ha Ha !!! more then a year later and how is that stimulus working out for ya ?! eh? Ha Ha Ha !!! unemployment lines any shorter ? eh?! Ha Ha Ha !!! how many working people lost their homes ? eh?! - can you tell me ? -'cos I sure can tell you how many Big Bank CEO's lost their homes , or jobs - NONE!!! . who's the big fool now ?! Heather Boushey - " he's looking at you kid ! "

[RCTPatriot75]

It wouldn't be as sad if the people that are putting out this propaganda actually believed it. They don't. They know it's BullShit. They think you are too stupid to recognize their goals. Control and World Government.

[greenitup]

chk out who funds this org. Soros?Sandler?These people have no concept, much less interest in main street. You work, they profit thru interest, dividends,Wall St.Parasites!Problem not gov't, problem is corrupt,bankrupt gov't.Wall St owns Congress.Bailout $ going to international banks. Focus on local solutions. Go to city council meetings,study city budget. You are the hero you've been waiting for.

[greenitup]

Focus on solutions.Every city, county, state can have its own credit unions,banks (no shareholders).Leverage for productive investment.Starve the corrupt big beasts,create small ones under tight leash-the people.We now pay interest to banks that create credit/money from digits (nothing). There are 2 economies:productive(goods and services) and extractive(Wall St-banks)that buys politicians, manipulates money/credit.Study Fed Reserve,banks-too big to fight but we can starve them to death.

[sds7508]

Everything the government has gotten their hands on has turned to BO. Funny how we have a new President BO. Letting government control Banks, healthcare etc is like letting a convicted child molester watch your children. Hope you enjoy your $13 dollars per week. I didn't know giving a bail out to planned parenthood, who by the way made a profit, Acorn, GE and the ACLU was supporting the average citizen. Did you know CA has 1971 pet projects like a train from LAS to Disneyland. I'm PO about BO!

[davfritz]

your dollar is about to collapse. The stimulus will not work.

[JBTG33]

Americans spend $1.16 for every $1. they earn......maybe "spending" isn't they problem. Spending money that you don't have ( both people and the government ) is a big problem.

[phoenixatom]

I love how you arbitrarily try to make it sound as though this crisis is all the American people's fault "hoarding groceries" and "hoarding money". The richest 5% of this country hoard over 60% of this countries wealth. Then there is over $2.5 trillion spent every 5 years on an already over bloated military budget (and has been spent that way for over 30 years now)...50%-75% of which is pork. Middle and Working class Americans are then allowed to fight each other over the crumbs left behind.

[phoenixatom]

lol are you kidding? the Government shovels money straight into the private industry. The majority of the military budget is spent on private contractors. Banks are mainly private industry, as is wall street...none of them seem to have done ANYTHING to help this country except steal from the mouths of children. They basically made their profits...took the money and ran. Private industry doesn't give a damn about this country, or the lives of the American people. Profit is all they care about.

[janetcat]

To be fair, gov was never meant to be efficient. It's overlaps kept a lot of things in line. The gov has tried to be a business in ways it should not be in-getting in the way of private indstry.