The American Recovery and Reinvestment act in 2009's goal is to;
- create and save jobs
-Foster unprecedented levels of accountability and transparency in ARRA spending.
-Invest in long term growth
The act was carried out after the great depression in order to meet the above listed goals, the government paid out ( basically means they injected the money into the system) approximately USD$ 816.38 billions, which will contribute to;
1.) tax benefits ($290.7 billions)
2.) Contracts, Grants and Loans ($ $261.2 billions)
3.) Entitlements ($ 264.4 billions)
The multiplier effect of the government injection is hard to measure in reality. However, for me, it sounds like the act actually "stimulus" the economy when it first started; new jobs had been created and somehow gave people the confident, that did not last for too long. Nowadays, economies around the world are slowing down even in the USA who is claimed to be the one who hold the highest GDP. So what is happening now is that since the economy is stabilised, people showed up with less confident in spending according to the fear that the situation like the great depression happen again, meaning that people would rather save more than spend showing sign in the decrease in multiplier. For my opinion, the government should have injected larger amount of money into the economy in order to see a successful multiplier effect. so when the government start to inject more, the population would somehow feel more wealthy and hence confident in spending. They might consider to save less as they are ensured by the economics situation, therefore the spending effect would increase larger than the portion of money injected; increase in multiplier.
- create and save jobs
-Foster unprecedented levels of accountability and transparency in ARRA spending.
-Invest in long term growth
The act was carried out after the great depression in order to meet the above listed goals, the government paid out ( basically means they injected the money into the system) approximately USD$ 816.38 billions, which will contribute to;
1.) tax benefits ($290.7 billions)
2.) Contracts, Grants and Loans ($ $261.2 billions)
3.) Entitlements ($ 264.4 billions)
The multiplier effect of the government injection is hard to measure in reality. However, for me, it sounds like the act actually "stimulus" the economy when it first started; new jobs had been created and somehow gave people the confident, that did not last for too long. Nowadays, economies around the world are slowing down even in the USA who is claimed to be the one who hold the highest GDP. So what is happening now is that since the economy is stabilised, people showed up with less confident in spending according to the fear that the situation like the great depression happen again, meaning that people would rather save more than spend showing sign in the decrease in multiplier. For my opinion, the government should have injected larger amount of money into the economy in order to see a successful multiplier effect. so when the government start to inject more, the population would somehow feel more wealthy and hence confident in spending. They might consider to save less as they are ensured by the economics situation, therefore the spending effect would increase larger than the portion of money injected; increase in multiplier.
RE