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Line 1: − + − Congress is sharply divided as to the wisdom of the [[American Recovery and Reinvestment Act of 2009]].<ref>On Jan. 28, 2009, the House of Representatives passed an $819 billion stimulus plan by a vote of 244 to 188. The measure passed without a single Republican vote in favor. [http://topics.nytimes.com/topics/reference/timestopics/subjects/u/united_states_economy/economic_stimulus/]</ref>+ + + + + + + + + +
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'''Economic stimulus''' measures such as [[spending bill]]s or [[tax cuts]] are reforms said by promoters to be designed to improve the economy. Of course, not all such measures succeed. Some can actually 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>
'''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. 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 partisan debate over stimulus spending.]]
Liberals in Congress passed a $789 billion economic stimulus bill in Feb. 2009 along party lines.
see [[American Recovery and Reinvestment Act of 2009]]
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.
==Notes==
==Notes==
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[[Category:Economics terms]]
[[Category:Economics terms]]
[[Category:Obama Administration]]