The business side of the Stimulus Act is essentially a tax policy in disguise, because the net effect of the stimulus is a reduction in taxes paid. However, the tax rate is not specifically addressed.
On the individual side, the stimulus is strictly microeconomic in nature and is not policy related. It is essentially a cash handout. Thus, on the whole the bill cannot genuinely be considered a component of fiscal policy. Rather, it is a one-time cash giveaway.
There is a potential multiplier effect of this legislation, but that effect is likely overestimated by the government. In principle, this influx of cash into the economy will lead to increased consumer demand and increased corporate spending. However, declining consumer confidence means that much of the stimulus money went into savings.
Likewise, businesses were not enticed by the moderate increases to their net incomes that resulted from the stimulus, certainly not to the extent...
The theory was that by giving consumers tax rebates, aggregate demand could be increased. This in turn would, along with the corporate tax cuts, give firms more confidence to increase their own spending. When the bill was being drafted, the economy was not yet in a state of total devastation, but there were signs of a pending recession. By drafting a bill that would increase aggregate demand, it was
The intention of the Act was to stimulate consumer spending. It focused on lower and middle income Americans, who might be more apt to spend rather than invest or save their tax refund. In other words, a wealthier individual might not hesitate to make a large purchase at any time, regardless of tax policy. But a lower or middle class individual who had been putting off necessary repairs, payments, or
They may feel and actually be 'out of the loop' of office politics because they lack a physical presence in front of their colleagues and superiors. As Woody Allen once observed, sometimes the most important thing in life is just showing up. Additionally, not all telecommuting workers are conscientious about doing their work. Without the supervision of a living, breathing manager they may use the extra freedom to slack in
Economics: The State of the U.S. Economy Cousin Edgar, a global investor, is seeking to capitalize on the thriving gasoline industry and the rising world demand for oil by purchasing several gas stations in the U.S. market. Inspiring his interest is the high price of gasoline, which he reckons will rise even higher in the near future, thanks to the urbanization and industrialization currently being witnessed in the developing economies of
Stimulus Bill Political Communication Political Communication during the Stimulus Bill Debate In times of economic uncertainty and national emergency, the government has the capacity to make decisions that it believes will aid the country in its time of need. Such a time of need occurred in 2009 when the country continued to face an existence of dire economic circumstances involving national cash-flow and jobs. In order to set economic recovery into motion,
The private sector tends to be against public sector funding, since it represents a basic redistribution of wealth from the ground up. Private sector economics has always held that the trickle-down economic models work best, where businesses and the very rich are given tax cuts and stimulus that is supposed to trickle down to the workers and the economy through renewed monetary business incentives. However, this form of economics,
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