![]() American Recovery and Reinvestment Act - Timeline - Slaying the Dragon of Debt - Regional Oral History Office. SUMMARY: The American Recovery and Reinvestment Act of 2. Stimulus Bill, was one of the first major pieces of legislation passed by the new Democratic Congress in 2. President Barack Obama. The legislation was a Keynesian attempt to lift the United States economy out of a major recession through federal spending. DESCRIPTION: The United States slipped into recession in December 2. Great Depression. The collapse of the housing market bubble and the related subprime mortgage crisis were the most direct causes of this recession. ![]() One result of these problems was the decline of both consumer and corporate credit and thus monetary liquidity across the economy. The question of how to best address the recession was the major issue of the 2. Candidate Obama argued that the economy needed a massive stimulus to get moving again. With the inauguration of President Obama and the beginning of the Democratic- dominated 1. Congress in January 2. Initial drafts of the bill called for as little as $2. CNNMoney.com's bailout tracker keeps tabs on the government's far-reaching. Program to buy consumer loan-backed securities. Economic Stimulus Act of 2008. The spending program was to impact most sectors of the economy and included aid to the unemployed, infrastructure projects, health care and education, law enforcement and homeland security, and new energy programs. In addition to the stimulus spending, the bill included new tax expenditures, including a home- buyers credit and auto- buyers credit. The estimated cost of the final bill was $7. It passed the House with no Republican votes and it passed the Senate with only three Republican votes. The legislation was signed into law by President Obama on February 1. Like the Emergency Economic Stabilization Act of 2. In addition to the critiques by small- government conservatives, others who are concerned about the increasing size of the national debt question the long- term risk associated with the stimulus package. Washington, DC: CQ Press, . Washington, DC: CQ Press, . All Rights Reserved. Comments & Suggestions. Economic Stimulus Act & 2. ARRA Research Paper Starter. MEMORANDUM FOR THE PRESIDENT. Emergency Economic Stabilization Act of 2008. Department's Troubled Asset Relief Program Monthly 105(0). Housing Economic Recovery Act 2008 - Housing. Housing and Economic Recovery Act of 2008. The program the letter references has nothing to do with relieving consumer debt. Economic Stimulus Act. The first was the Emergency Economic Stabilization Act of 2008 which was designed to deal with the. Consumer spending is largely tied. Economic Stimulus Act of 2008 The Economic. The hope was that the targeted individual tax rebates would boost consumer spending and that targeted tax. The recession that began in 2. In a way, it was caused in part by consumers, many of whom were convinced by unscrupulous lenders that they would be able to make tremendous investments in the real estate market. Economic Stimulus Act of 2008. The overwhelming number of homeowners whose debt eventually overcame them sent shockwaves through the financial system and eventually helped slow down the economy to a degree not seen since the Great Depression of the 1. At the earliest stages of the recession, an economic stimulus package was offered by Congress to prevent a worsening of the country's fiscal condition. At the tail end of the recession, another recovery package was offered to prevent a return to fiscal instability. ![]() ![]() This paper will review these two actions — the Economic Stimulus Act of 2. American Reinvestment and Recovery Act of 2. Keywords: American Reinvestment and Recovery Act (ARRA); Depression; Economic Stimulus; Housing Bubble; Subprime Mortgages; Tax Incentives; Troubled Assets Relief Program (TARP)Overview. One of the most maligned figures of the Great Depression was President Herbert Hoover. He is blamed for both not acting during the crisis and managing a government intervention that was terribly misguided. However the public may have felt about Hoover either during his administration or in the years that followed, his perspective on the critical importance of industry and the consumer was well- founded. This trend continued through the beginning of the 2. United States experienced two recessions in its first decade. For example, the government's response to the 2. September 1. 1, 2. The recession that began in 2. The overwhelming number of homeowners whose debt eventually overcame them through subprime and even fraudulent lending sent shockwaves through the financial system and eventually helped slow the economy to levels nearly like the Great Depression. This paper will review the two actions employed by the government to end the crisis: the Economic Stimulus Act of 2. American Reinvestment and Recovery Act of 2. The Causes of the 2. Recession. On the tail end of the 2. Federal Reserve (also known as . The rationale was simple — lower interest rates attract investment in housing, business loans and other areas of economic growth. The move worked, as more and more potential homeowners entered the market, spurred by the perception that they could indeed afford to pay monthly mortgage rates. However, starting in 2. Fed responded by gradually increasing interest rates (Beese, 2. The change in interest rates came as a shock to the growing number of homeowners. They had already emerged from the 2. In the six years between 2. American consumption during that period (Henwood, 2. A large percentage of these homeowners were committed to subprime loans — loans that were offered to people with poor credit — which were growing in popularity due to aggressive marketing by lenders and endorsements by the federal government (Holt, 2. Adding to the . In fact, this practice became one of the most prolific of lending practices, with major institutions purchasing or developing subprime lending companies to tap into this increasingly popular type of mortgage. Major financial institutions such as Citigroup, Merrill Lynch and AIG, as well as their subprime subsidiaries, were concerned with loan quantity rather than quality (Burry, 2. In fact, many saw little reason for concern about the risks of lending to people with low credit, since the innumerable quantity of subprime mortgages could be securitized on the market and backed by the federal government. By 2. 00. 7, the housing bubble began to collapse upon itself, creating a devastating confluence of issues. As home prices began to retract, homeowners found themselves with less equity in their homes than they were paying in mortgages. A great many simply could not afford to make their monthly payments, sending their mortgages into foreclosure. The sudden toxicity of subprime mortgages meant that banks would lose millions — many institutions that had placed such loans on the market in speculative trades were now faced with a widespread volume of losses, and they did not set aside enough money to cover those losses (Appelbaum & Cho, 2. These factors helped create one of the longest recessions in U. S. Lenders were unable to provide credit to businesses, which in turn were forced to lay off workers. The high volume of personal debt and lack of jobs created sizable shortfalls in tax revenues for state governments, causing them to slash budgets. Meanwhile, international markets were impacted by the financial industry's woes; the U. S. The recession was so widespread and impactful that few political leaders, media outlets or casual observers could resist comparing the 2. Great Depression. As the recession took hold, the administration of President George W. Bush sought to reverse the malaise by infusing consumers with tax rebates and lower interest rates. After the recession came to an official end, however, growth continued at a minimal pace into the term of President Barack Obama, who offered another set of federal intervention policies. Applications. The Economic Stimulus Act of 2. Consumer Rebates. President George W. Bush's first response to the economic crisis focused on infusing money into the consumer base. Nearly 8. 0 percent ($1. Most individual taxpayers would receive $6. Individuals with incomes of $7. Rather, the stimulus rate reduces by five percent of the amount of income that exceeded the $7. Additionally, parents with children under 1. Child Tax Credit would receive an additional $3. The Economic Stimulus Act quickly moved through Congress in a mere four weeks. The speed of the bill's passage was indicative of the bipartisan desire for the government to quickly halt a recession before it took full root. The Senate took two weeks deliberating the bill before adopting it on February 7, 2. Later that day, the House took the matter up and, by another impressive vote differential of 3.
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