Is Bush's Economic Stimulus Package a Good Idea?

[May 20, 2008.]

 

With the US facing a strong economic backlash from the housing bubble and consumers spending less than ever, the Bush administration has announced an economic stimulus package that will have U.S taxpayers receiving checks of around several hundred dollars from the federal government. This plan, conceived in order to stimulate the economy, will affect tens of millions of Americans -- especially those in the middle class and lower classes -- and will hopefully create job and cause the economy to turn around and start growing again. However, not everyone is pleased about this deal, and some have criticized it on several grounds.

The package, which was promptly given majority approval by legislation, would involve sending checks worth $600 to individuals and $1,200 to couples who have paid income tax and who filed their taxes together. Those people who did not pay any federal income taxes but who had a total income great than $3,000 would receive checks valued at $300 per individual or worth $600 per couple.

Nancy Pelosi, Speaker of the House of Representatives and a Democractic of California, has that she she hopes the government can take the money and put it in the hands of Americans as soon as possible. She added that as many as 116 million American families -- not just individuals -- will get a rebate check, making this a very anticipated deal for some.

Be that as it may, not everyone is happy about the stimulus package. Some citizens are concerned about the cost of the stimulus package on the economy in the long-term, and economic strategists are critical of it, citing how the Treasury Department has yet to analyze the numbers that will determine the price of the stimulus package. Furthermore,  the belief many taxpayers hold is that the amount promised is "too little, too late", and won't make much of an impact on their financial woes.

On the other hand, proponents of the package agree with the government, stating their sentiments that the package is a right move on the part of leadership and shows responsibility for the country. They believe that the stimulus package will address economic concerns stemming from the current worldwide credit crunch which was the result of a mortgage crisis and sliding stock market values. Towards that end, the package should reduce the short-term costs of taxes and provide many people with the money they need to pay their debts and purchase goods which will then promote activity in the ailing economy.

Despite the optimism on part of some people, one of the biggest concerns over the package stems from the fact that it would increase the already enormous government deficit, a financial problem that is hurting worse due to the weakened economy. Some financial gurus have estimated that the deficit would reach up to $250 billion dollars in the future.

The proposed economic package is credited by both political parties as being the idea of Treasury Secretary Henry Paulson, who was formerly the Goldman Sachs executive and is widely known for possessing a shrewd grasp of the economy and its market structure. He was noted for making aggressive efforts to push the package through the bureaucracy and speaking to practically every member of Congress concerning it.