In 2009 President Obama introduced a stimulus package to help the American economy over come the economic issues that developed over the last decade. His unique strategy has been the center of a fierce debate and continues to be an issue for the American people to this day. The arguments surrounding this issue center on the $787 billion dollar plan designed to give a radical start to economic growth and save millions of jobs, which thus far has done neither. The most noted failure of the plan is the more than 2.5 million jobs that have been lost as opposed to the initial goal of the plan, which was to not only save jobs but also create 3.3 million new ones (Amadeo, 2011). There is evidence to suggest that government spending has lead to an increase in production at factories putting unemployed individuals to work, however removing funds elsewhere in the economy would be what financed this causing a loss of funding and workers elsewhere. In fact, claims that increased deficit spending is an effective cure to a recession does not hold up to historical evidence or current results of this plan. Congress does not have the finances to distribute the government spending leading to more jobs, which is supposed to end the recession.
Before the economy began to falter in the late 2000’s the current unemployment rate seemed an impossible future. The prediction of high unemployment rates sparked fear for Americans, which led to the promises made by the Obama administration to prevent this. This forecast made by the administration stated that unemployment rates would not go above 8 percent, giving the people hope, making it less difficult for the bill to pass. This claim proved false as the rates reached 10.2 percent at the pinnacle of unemployment rate fluctuations (Somberg, 2011). The promises that were made had been broken and more people were without jobs than before the stimulus had been put into affect.
It is important to keep in mind that stimulus spending draws economic activity to short-term projects, which in theory should create more jobs. The issue with this is that short-term projects do not necessarily lead to long-term successfulness for the job market or the economy (Randazzo, 2009). It may provide a job now and give the people money to invest, but this generally does not last and we do not gain anything that will help stabilize the country’s economy. In fact, in order to put money into the economy the government must first take the money out in forms of taxes, national debt, or the printing of money leading to inflation, therefore proving that the stimulus package has to damage long-term prosperity in order to create short-term economic relief.
Employment is unsustainable when short-term projects, such as working on infrastructures, are finished. If a company were granted money to work on a road or bridge, it would hire people for the job, thus creating jobs. However when the project is completed and the stimulus money is gone the companies would not be able to afford the continuation of employment of these people. Overall, the lasting affects of the stimulus are more damaging than rewarding to the future economy.
Learning from the past is meant to prevent the future making of similar mistakes. This is not the case when it comes to stimulus spending if one compares the Stimulus package to the “New Deal” during the great depression. Our national debt doubled during this time period with the “New Deal” in affect. It boosted our economy for the time being, but it left future generations with more debt and financial issues, leading up to the economy failing today (Randazzo, 2009). Stimulus spending lead to the economic crisis we are dealing with today, yet we are still attempting to recreate the institutions and policies that created it. The problem is when temporary solutions are implemented our country may not be able to handle the debt left for future generations if the same results from the depression occur. When