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Economic stimulus (view source)
Revision as of 20:49, September 13, 2025
, 20:49, September 13, 2025no edit summary
[[Image:Stim1.jpg|thumb|380px|Conservative cartoonist Chuck Asay summarizes the 2009 partisan debate over stimulus spending.]]
[[Image:Stim1.jpg|thumb|380px|[[Conservative]] cartoonist Chuck Asay summarizes the 2009 [[partisan]] debate over stimulus spending.]]
'''Economic stimulus''' measures such as [[spending bill]]s or [[tax cuts]] are designed to improve the economy when it is in recession and the private sector is so frozen that it cannot spend or loan money. Conservatives favor cutting taxes, liberals prefer to spend money borrowed from future taxpayers.
'''Economic stimulus''' measures such as [[spending bill]]s or [[tax cuts]] are designed to improve the economy when it is in recession and the private sector is so frozen that it cannot spend or loan money. Conservatives favor cutting taxes, liberals prefer to spend money borrowed from future taxpayers.
The risk is that it might depress the economy, e.g., by reducing incentives for investment, especially if there are strings attached to the stimulus. According to the [[Congressional Budget Office]], "Fiscal stimulus aims to boost [[economic activity]] during periods of economic weakness by increasing short-term [[aggregate demand]]."<ref>[http://topics.nytimes.com/topics/reference/timestopics/subjects/u/united_states_economy/economic_stimulus/]</ref>
The risk is that it might depress the economy, e.g., by reducing incentives for investment, especially if there are strings attached to the stimulus. According to the [[Congressional Budget Office]], "Fiscal stimulus aims to boost [[economic activity]] during periods of economic weakness by increasing short-term [[aggregate demand]]."<ref>[http://topics.nytimes.com/topics/reference/timestopics/subjects/u/united_states_economy/economic_stimulus/]</ref>
[[Democrat]]s in [[Congress]] passed a $789 billion economic stimulus bill in Feb. 2009 along party lines.
In the early 1930s [[British]] [[economist]] [[John Maynard Keynes]] introduced the theoretical model of how government spending can help an economy out of a severe recession like the [[Great Depression]]. President [[Herbert Hoover]] had engaged in a massive stimulus spending program that came close to [[bankrupt]]ing state and local governments as the [[economy]] continued to spiral downward 1929–32. However, Hoover '''raised''' [[tax]]es, which economists agree was bad medicine. The [[New Deal]] engaged in massive stimulus spending which to a large extent did stimulate the economy and brought it back to levels of the mid 1920s, but did not end high [[unemployment]].
In the early 1930s British economist [[John Maynard Keynes]] introduced the theoretical model of how government spending can help an economy out of a severe recession like the [[Great Depression]]. President [[Herbert Hoover]] had engaged in a massive stimulus spending program that came close to bankrupting state and local governments as the economy continued to spiral downward 1929–32. However, Hoover '''raised''' taxes, which economists agree was bad medicine. The [[New Deal]] engaged in massive stimulus spending which to a large extent did stimulate the economy and brought it back to levels of the mid 1920s, but did not end high unemployment.
==See also==
==See also==