The Naked Stimulus

Only available on StudyMode
  • Download(s) : 133
  • Published : April 16, 2013
Open Document
Text Preview
I. Summary
The stimulus package was created by President Obama and his administration to help the recovery of America’s recession. The stimulus package was designed to give tax payers extra money that they will spend on the economy lifting America out of the recession. However, instead of using the stimulus package, the money could’ve been saved and still achieve the same effect as the stimulus package. Saving money will “have precisely the same impact on national income as spending.”This is because economic math proves that the GDP(gross domestic product) cannot be raised when transferring monies from one group of people to another. Whether or not the money is spent in stores or sits in a bank account, it is being used in different ways but still achieves the same effect on the economy. However, saving money also proves to be more useful when looking at long-term improvement. Savings are what provide investment opportunities. When savings are in a bank account, that money will be loaned by the bank to another person or company, who then spends it on a car, or house, “that lifts GDP by the same amount.”As long as your money is in a bank, saving will do just as well for the economy if not better than spending money as much as possible to try to “stimulate” our economy.

II. Critique
After reading this article, I had a hard time personally finding anything wrong with the article. I found that the points made all seemed logical. From what I understand, GDP is a formula used to determine the strength of an economy. It measures the value of goods and services that a country provides in a year’s time. The stimulus package “redirected” money to taxpayers. Money was the incentive to buy newer vehicles, homes, and certain, environmentally conscious goods. This money, whether in the hands of taxpayers or The Fed, would have been used regardless. The idea that the Stimulus Package is supposed to revive the economy doesn’t make sense. I know this is not my field...
tracking img