Changes

For the $789 billion 2009 stimulus, which is now law, see [[American Recovery and Reinvestment Act of 2009]].

For the $789 billion 2009 stimulus, which is now law, see [[American Recovery and Reinvestment Act of 2009]].

The risk is that it might depress the economy, e.g., by reducing incentives for investment. 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. 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>

[[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.]]

Democrats in Congress passed a $789 billion economic stimulus bill in Feb. 2009 along party lines.  

Democrats 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 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.

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.