Economic Stimulus 101

Posted March 12, 2009

Economic Stimulus 101

Can we spend our way out of a bad economy? Explore the costs, benefits and impacts.

$787

billion

Total value of the American Recovery and Reinvestment Act signed into law by President Obama on Feb. 17, 2009.

Basic Overview
How we got here, where the money is coming from and where it’s going to.

Will it Work?
The stimulus plan’s anticipated effects, and where things could go wrong.

Unemployment
National unemployment rose to 8.1% in February. Can stimulus reverse the trend?

Bailout Nation
Does bailing out banks and the auto industry help or hurt our economy?

Historical Parallels
What are the similarities to and differences from the Great Depression of the 1930s?

National Debt
The national debt surged past $10.9 trillion in March. What are the consequences?

Underlying Problems
A closer look at some of the root causes of this economic crisis.

The S-Word
Are Obama’s policies moving us toward socialism? What does that mean, anyway?

Note: Adobe Flash is required to view the videos. Download it here.

Basic Overview

Professors describe the background of the economic crisis and stimulus plan:

“The basic problem we’re facing now is insufficient spending.”
⊕ Launch video

“[The crisis] started in financial markets… and we are now in a nervous part of the recession.”
⊕ Launch video

“[The bill is] a fiscal stimulus package and it’s absolutely necessary.”
⊕ Launch video

“It’s not just a financial crisis, it’s a much deeper crisis of our economic system.”
⊕ Launch video

“None of us truly understand what happened and how to fix it.”
⊕ Launch video

Where is all this money coming from?

“The money comes from borrowing.”
⊕ Launch video

“We will run a short-term deficit in order to finance this program.”
⊕ Launch video

“You need to make a distinction between the gross expenditure and the net effect on government budgets.”
⊕ Launch video

And where is the money going to? What’s in the bill?

A breakdown of tax cuts and government spending categories in the stimulus plan.
⊕ Launch video

“It breaks up into three broad categories: tax cuts, aid, and direct spending by government.”
⊕ Launch video

“There’s just little bits of money going all over the place; a lot of this money isn’t being spent any time this year.”
⊕ Launch video

What is the effect on state and local budgets and spending?

State and local governments must operate under a balanced budget, which leads to many cuts in a bad economy.
⊕ Launch video

“I was a little disappointed to see that there’s been a pull-back from the aid to state and local governments.”
⊕ Launch video

↑ Back to top

Unemployment

Will the stimulus plan help reverse the trend in rising unemployment? Does it matter where we put people to work?

“At least to the extent that it will slow the bleeding. We’re applying a tourniquet right now.”
⊕ Launch video

“If there is spending, then firms will hire workers because they’ll see a demand.”
⊕ Launch video

“The real net benefit comes if we actually make [workers] produce something that is useful.”
⊕ Launch video

Which industries have been hit hardest by job losses? Which industries show the most promise?

“A lot of jobs have vanished in the financial services industry.”
⊕ Launch video

“There is vibrancy, there is some hope, for new products and new technologies.”
⊕ Launch video

“If I were young, I would pick industries that are young now and will be bigger in the future.”
⊕ Launch video

↑ Back to top

Next section →

Produced by Jackie Hai, Richard Caesar and Frank Godinho, AmherstWire.com.

Facebook Comments

Tweet Life

Tweets by @AmherstWire

Politics

Rep. Neal denies signature to strikers demanding climate change reform

Lily Robinson, Contributor

Even under renewed community pressure, Neal refuses to sign on to the Green New Deal or the No Fossil Fuel Money Pledge.

View All

Opinion

Hip-Hop MVPs of the decade: 2012 and 2013

2012 and 2013 set in stone a new hip-hop hierarchy and laid the groundwork for the new sounds of hip-hop to come. While Kanye West didn’t show signs of slowing down, it was clear that the crown sat at the top between Drake and Kendrick who stared at each other from the castles they built just three years into the decade.

The Zoo Report: Jonathan Kermah on being co-editor in chief of Amherst Wire

Tune in to hear hot takes on hooking up with exes, Disney+ and ranch dressing.

(Fake) Blonde Moment: Billboard’s Woman of the Year, Hallmark holiday films and finals week.

Tune in to hear Chad and Grace's takes on corny Hallmark holiday flicks.

View All