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The United States leadership is fond of implementing economic stimulus packages when the economy takes a downturn. The global economic recession witnessed in recent years has necessitated the formulation and implementation of stimulus of two stimulus packages in a period of less than two years. These packages have been formulated with job creation as one or their main targets; implying that their success can be evaluated based on the rate of improvement in employment statistics.
On February 7 2008, the then President of the United States George Bush signed an ambitious bill known as the Economic Stimulus Act of 2008 (CCH Group, 2008).
The $152 billion package was aimed at jumpstarting the economy (CCH Group, 2008). The Economic Stimulus Act (2008) was an imposing bill passed by the United States Congress as an approach to address the wavering economy. The main aim of the package was to arouse consumer spending and bolster the expansion of businesses, thereby creating more job opportunities and spurring economic growth.
Supporters of the Economic Stimulus Act (2008) believed that the legislation would shore up the economy and conceivably avert a recession, or at least mitigate the impacts of the economic recession of to the people of the United States.
On the other hand, critics of the Act noted that that the United States had an enormous national debt, with many countries such as China holding much of the United States debt; thus, the stimulus package would create a catastrophic condition for the country (Ertelt, 2009).
Another point behind the argument was that the stimulus package would increase consumer spending mostly in high value equipment made outside the United States, implying that even though more jobs would be created, they would be inconsequential to the economy (Ertelt, 2009).
The other economic stimulus package was signed by President Barack Obama on February 17, 2009 (Kelley & Fritze 2009). Dubbed the American Recovery and Reinvestment Act of 2009, the legislation will expend $787 billion between 2009 and 2010 (Kelley & Fritze 2009).
Among the benefits anticipated from the package are development of supplemental opportunities for job creation and preservation, improvement of efficiency in energy and science, investment in infrastructure, provision of assistance to the unemployed, and so forth (House Appropriations Committee, 2009). As it can be noted from the previous statement, most objectives of the economic stimulus package target increases in employment, meaning that the rate of decrease in unemployment will largely be used to evaluate the effectiveness of the stimulus.
As shown above, there are many issues other than unemployment which can be used to rate the stimulus package. This paper will evaluate the stimulus package in the context of the aforementioned issues with particular interest in the common opinion that a decline in rate of unemployment can be used as a determinant of the effectiveness of the package. The paper will be based on the standpoint that whereas economic stimulus packages reduce unemployment, unemployment per se cannot be used as the most effective tool to rate the economic stimulus package.
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