Government Spending Essay

313 WordsApr 20, 20092 Pages
On February 13, 2009, Congress had passed the $787 billion fiscal stimulus package to help stimulate our economy. This stimulus package was designed to push money into the sinking economy to try and jump start businesses so they can grow and flourish. President Obama’s plan to help stimulate our economy includes help for low income citizens and the jobless, tax cuts for workers, social security bonus, housing and car incentives, going green, help paying for college, and health care coverage. Government spending consist of government purchases; which also includes transfer payments, and taxes. It is also considered to be one of the major components of gross domestic product. Consequently, with the private sector not spending, the government can take the place of the private sector to increase spending. This will put these idle resources back to work. With the newly found income, workers will be able to spend again, increasing consumer demand. Once consumer spending rises, the government can slow their spending since they will no longer be needed to pick up the slack. There are two types of government spending—discretionary and mandatory. Discretionary spending is roughly one-third of all Federal spending, which includes money for things like the Army, FBI, the Coast Guard, and highway projects. Mandatory spending accounts for two-thirds of all government spending. It is authorized by permanent laws which include entitlements such as Social Security, Medicare, and Food Stamps. Looking at the needs of our country, the main focus of the fiscal stimulus package is to provide relief to our society. On the other hand, “the stimulus spending will likely be too small, given the size of the economic decline, and suggests Congress may have to revisit the issue.” (Kirchhoff, USA Today). In my opinion, this article contains elements of normative economics because
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