What the Main Points of Obama's Stimulus Package?


Quick Answer

The American Recovery and Reinvestment Act of 2009, often referred to as the stimulus, was introduced to save and create jobs. The secondary objectives were to spur economic activity and invest in long term growth containing spending in infrastructure, education, health and energy.

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What the Main Points of Obama's Stimulus Package?
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Full Answer

The stimulus was a large fiscal expansion act. It was adopted to revive the economy from the Great Recession. The government provided funding for tax cuts and benefits for millions of working families and businesses. The tax incentives for individuals were supposed to increase consumer spending, and the tax incentives for businesses were intended to create jobs.

Based on Keynesian macroeconomic theory, the government released funds for entitlement programs, federal contracts, grants and loans. Health care spending subsidised Medicaid, health care insurance and health information technology investments. Education funds were distributed to local school districts to prevent layoffs, and the funds were allocated for low-income public school children. The government also subsidised transportation, energy infrastructure, communications, information and security technologies.

The originally estimated expenditure to attain the goals was $787 billion. In 2011, the expenditure was raised to $840 billion. Although the package was designed to be spent over ten years, 91.5 percent was budgeted for the first three fiscal years to spur the economy.

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