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Rumors of a Second Stimulus Package

The rumors of a second stimulus plan could turn out to be true as many people feel that the first one of $787 billion was just not enough. Nearly half of the amount of the first stimulus plan has been spent and still there has been no noticeable impact on the economy according to many experts. Certain experts and economists feel a greater boost is required in infrastructure and public work projects for which the amount allocated in the first stimulus plan is not enough and therefore a second stimulus plan is called for.

Although many experts feel that the first stimulus plan has had a positive impact on the economy, the previous forecasts of the sickness of the economy were understated. They feel that the economy had really gone bad and the reports were not showing the correct picture, hence the first stimulus plan did not have the impact it was supposed to have. These experts presume that a second stimulus plan will quicken the recovery process. For Obama, this comes as a job stimulus bill to help create and preserve more jobs, so that the unemployment rate decrease from its historic high of double digits.

The Administration on the other hand feels that it is too early to pass a judgment on the first stimulus plan and discussing about a second one already is a bit premature. They feel that the measures which are in the first stimulus plan have not been fully implemented and they would take time. Many projects have been allocated funds but they need proper planning and execution through a contract which will take time. Once these projects are under way their effects will start showing on the economy and that would be a better time to judge the current stimulus plan and then think about a second one if needed.

Although the unemployment rate has touched 10% and growing, compared to the estimated 8%, President Obama still feels that a second stimulus plan is not needed yet. Experts on the other hand say that the first stimulus plan was based on forecasts which were not true. These forecasts did not give the correct picture of how badly the economy had gone down, and since the first stimulus plan was based on the false forecasts it did not have the desired effects.

Many of the Democrats themselves feel that the rate, at which the implementation of the first stimulus plan is moving, is much too slow. The dispersion mechanism of the plan was not good enough for a faster distribution of various aids and stimulus packages. Also many economists feel that a second stimulus package is affordable by the United States although there is rising fiscal deficit.

Many experts feel that a second stimulus plan is in order, as more investments are needed for growth in the economy and United States should not depend on consumption as an indicator of economic growth. The second stimulus plan should promote growth in the manufacture of export items and the dollar rate needs to go down for United States to compete in world trade.

Putting together the expectancies of the people and the growth achieved by the first stimulus plan it is not surprising that there are rumors of a second stimulus plan.

Tags: jobs, Stimulus

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