“Stimulus plan” is the phrase commonly used by people to describe the massive amounts of money the government is spending to help stop the economic freefall. The other name and the more technical term for this is, The American Recovery and Reinvestment Act of 2009 (ARRA).
The act, passed by Congress and signed by President Obama Feb. 17, 2009, resulted in the government pumping $787.2 billion into the economy to help stop the longest economic downfall since the Great Depression. The ARRA hopes to prevent a longer recession by using the $787.2 billion on individual and small business tax cuts, investments in a variety of sectors (science, education, public works, etc.), and aid for states and programs serving individuals (unemployment, insurance, etc.). Basically the main goal of the ARRA is to jump-start the economy, with the $787.2 billion, and hopefully prevent a longer recession.
Goals of ARRA?
- To preserve and create jobs and promote economic recovery.
- To assist those most impacted by the recession.
- To provide investments needed to increase economic efficiency with technological advances in science and health.
- To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits.
- To stabilize State and local government budgets
Where is the money being spent? Of the $787.2 billion:
- $287 billion will be used in a form of tax cuts and breaks for individuals and small businesses (e.g. “Making Work Pay” tax credit, EITC, and First-time Homebuyers Credit).
- $308 billion will be used for discretionary spending (science, education, energy).
- $192 billion will be used for direct aid to states and for programs that help individuals in need (i.e. unemployment).
For a complete list of all of the government’s spending allocations please visit ARRA Spending.
