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2008-09 Stimulus Impact in 2010

With the latest round of the fiscal stimulus plan taking place, many question what the 2008-2009 fiscal stimulus impact in 2010 would be. Are they going to show that a gradual build-up was needed, or as many have suggested, a more direct approach should have been taken with larger sums of money being spent at once, rather than let it trickle in. Economists argue that without the money that has already been spent, the GDP of American would have been in the region of minus 6%, rather than the minus 3% it is currently at.

This does not seem like a huge difference, but a further drop of 3% in GDP would have dire consequences for America. Actually not only in America would there be repercussions, but this would also be felt globally. With less money to import, America would be causing more hardship on lesser developed nations trying to earn much needed foreign currency to bolster their own economy.

Many have argued that the 2008-2009 fiscal stimulus impact in 2010 would be the laying of a foundation that the country’s economy can be built on, and that as more money is spent, so consumer confidence is brought back, fewer unemployment happens and that companies will eventually towards the end of 2010 actually have a positive employee gain rather than the countless lay-offs that have occurred, especially since the beginning of 2009. Many welcome the changes that President Obama’s government have brought to the growth plan, and many argue that more is needed in larger quantities and that this should not stop until positive proof is in place that it is not a false economy buoyed by a sudden influx of money into the system.

Many argue that the economy will right itself once financial checks are in place with regards to financial mismanagement of government spending, and that the money should be spent more on the unemployed and to halt the foreclosures taking place on a daily basis. Without this, the consumer will not have enough confidence to go out and spend, especially in the housing market, and this is where government needs to be stronger with its aid. As home prices tumble, more consumers are effected and bring about a negative spending pattern, where people should be putting as much money as possible into their mortgages to prop up the banks with money not given to them by the government, the homes are foreclosed upon and the consumer as well as the banks lose money in the whole transaction.

The 2008-2009 fiscal stimulus impact in 2010 will come to nothing if consumer confidence is not restored, and billions of dollars would have been wasted if this does not happen. The only way to do this is a further implosion of money into the markets, and greater thought should be put into the actual destination of the money, and not just handed out to the next company that decides it might not make enough profit this year to actually pay out some bonuses. Failure should not be rewarded.

Tags: bank, check, government, market, money, mortgage, price, Stimulus

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