How exactly does this stimulus pkg going to stimulate the economy?

Question

I discovered recently that there are absolutely no provisions for small business start ups or incentives - how exactly will this stimulus pkg actually stimulate the economy?

Why, or why not?

Answer 1

Tax cuts to the middle class will put money in the hands of people to who need goods and services that for the past 6 months they haven't been able to buy (or afraid to buy).

This will stimulate mostly retailers who will continue to employ people and should stimulate shippers, distributors wholesalers which will add another level of economic revival.



There will also be infrastructure spending to fix and repair roads, bridges, airport runways, school buildings, water pipes, and electric power delivery grids etc so that people can get to work, goods can be transported. We need reliable roads, transportation and we need reliable utility service and ample supplies of clean water. The side benefit to this is that it will require business to hire workers to do this work which should help relieve unemployment.



Finally, there will be some $$$ set aside to for the governrment to buy & liquidate 'bad assets' from banks. Taking bad assets off a banks balance sheet will make it possible for them to free up loss reserves and lend it to people and businesses who are credit worthy.



In order for all of this work, a lot of things have to go right. America will have hard time absorbing another Hurricane Katrina and a lot of the money will have to come from the money saved once the Iraq War ends.

Answer 2

Oh Nancy,

It would be so better understood if we just called it a Government Stimulus. I keep trying to think of ways to take advantage that they are handing money out hand over fist to the weakest, but my husband keeps stating that he will not accept entitlements.

It is so very sad that someone called in on the Early Show, I think it was, and was a small business owner and wanted to know how the stimulus would help her. Biden was there to field the calls, and his answer, as pathetic as it was, addressed the logistics of GETTING to the business, like if a bridge was down or something, the stimulus would build that bridge again. ARGGH! Can't people see how pedestrian this administration is? And that was a word selected for Sarah, who would be, right this minute, devising plans to straighten out those thugs and liars in the Congress.

Answer 3

I am happy you are "missing something"--and you should be too--you just don't know it!! Having listened to my grandparents and great grandfather's stories from the great depression of the 1930's and the despair and devastation that occurred then, you should be very happy that all the western countries decided to engage in a stimulus spending plan in an attempt to avert another economic disaster like the great depression of the 1930's. IMO the major financial problem of the US is it's war mongering policies and years of unnecessary aggressive military actions in foreign lands. How many trillions of dollars were wasted there under Dubya??

Answer 4

The stimulus stimulates the economy by investing in a wide variety of sectors: infrastructure, energy, education, and health care chief among them. The aim of this is two-fold: to create jobs in the short-term, and lay the foundations for long-lasting prosperity in the long-term. People with jobs have money which they can then spend, fueling the economy and allowing businesses to expand once more, creating jobs, as there is now a demand to be filled. Gone are the false premises of Reagonomics. Demand creates supply. The stimulus bill also seeks to put more money in American pockets, especially in the pockets of poor Americans, who spend nearly all of their income. The stimulus spending is spaced out to slowly wean the economy from government money as it recovers. Small business cannot fill the breach in this economy: expanding in this environment is nearly impossible, given the lack of credit and the lack of demand for anything. Too long have we trusted blindly in the myth of the "invisible hand" of the market. It is time for the government to govern once more.

Answer 5

This is what they say....as far as the spending goes....you have to spend to stimulate, which is correct....however this spending is only going to go in the pockets of their friends. Plus he is giving stimulus money to these big companies, at the same time increasing their taxes.....so he is actually giving them money that is taxable and that he is going to take back in the end anyway, so really Obama is not helping the big companies at all. with Obama raising taxes this stimulus money will not make these employers keep employees, they will still have to lay them off in order to pay these taxes. Few are smart enough to see this side of the stimulus handout.

Answer 6

It won't stimulate its a spending bill of earmarks that will have almost no impact on the economy at all

Answer 7

It will help Democrats in Congress get reelected. That is the goal.

Answer 8

It will do NOTHING to stimulate anything but the generational debt this nation will owe!

Answer 9

zero.... like a magic gone wrong