What is the Current Federal Stimulus Status

January 29, 2010

The impact of the collapse of the economy can be felt globally, and almost all businesses, investors and individuals have been badly affected, by the resulting recession. The Stimulus plan was an attempt to restore the economy to its previous status and also promote confidence in the investors so that there could be sustainable growth of the economy. It has been a year since the legalization of the plan and the question on everybody’s mind is, “What is the Current Federal Stimulus Status?”


Well, we cannot say that the stimulus plan was a complete failure, and at the same time the results are not as rosy as the ones which were forecasted. The main concern has been the unemployment rate which stands at 10% although it was meant to be a maximum of 8%. Although this is the case, many new jobs are being created as more of the stimulus spending is utilized in the projects for infrastructure and other public works.

As per the current Federal stimulus status, a lot of confidence has been restored among the investors which can be seen by absence of major volatility in the stock index. The major effect is the nationalization of most of the residential mortgage loans, as Fannie Mae and Freddie Mac has been taken over by the government. Also with the TARP (Troubled Asset Relief Program) the government is continuing to gain major ownership stakes in many of the leading financial institutions. Although most of the confidence has been restored in the economy, what effect this major nationalization will have on the future of the economy is not clearly known.

Many homeowners have been benefitted by the rescue measures initiated by the stimulus plan. They have been given new payback structures which are more financially viable and tailored to individual financial capacities. The residential mortgage rates have declined to under 5%, which were more than 6% and rising before the plan came into operation. Majority of the foreclosures have been averted and many are now paying their monthly mortgage payments regularly. This in turn has generated a regular flow of revenue for the government who has purchased the mortgage-back securities from banks and other lending institutions.

Due to the various measures implemented by the stimulus plan the LIBOR rate has fallen, facilitating more loans between banks. This has improved the liquidity to quite an extent and there is more money available for investment, which is being used for further economic growth. Although this is the case there is still a shortage of funds in many sectors, and the economy is not recovering at the rate that was expected.


Many of the projects which were slated to start in energy, infrastructure and public works have been delayed due to the time lag experienced during planning and handing out the contracts. This has slowed down the availability of new job opportunities, but the forecast is that this year many jobs will open up in these sectors.

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Written by Uncle Sam · Filed Under Stimulus 

Comments

5 Responses to “What is the Current Federal Stimulus Status”

  1. Bess Mostardo on March 10, 2010 at 4:10 pm

    Was the $250.00 stimulus money I received in 2009, have to be shown on my tax form 1040?, I just filed for 2009?

  2. jake snoddy on February 25, 2010 at 11:14 pm

    I would like to know what ever happened to the plan for people who cannot make there home mortgages????????????????We have sent letters and more letters (certified) but we are not getting the answers we desperately need nor deserve………….Thanks……………………

  3. linda pfleger on February 19, 2010 at 7:44 pm

    I am really happy that people have had help with there homes.Every web site I go to I get different information yes we are getting it ,no were not getting it.the government is keeping on a yo-yo string.But there’s always $ to send over seas or to study the sex life of a goldfish!How about it ,stop playing with our minds and give us something to be a know fact ! Thanks.

  4. Michael Fragale on February 9, 2010 at 12:45 am

    Supply and demand?? Subsidize manufacturing of solar and wind generation. The demand would be instantaneous! And, as a bonus, the US could hold on to it’s fossil fuel supplies. Therefore, it would not represent a setback to big oil or coal. Regardless, these latter items are finite, in a sense, whereas the sun and wind are unlimited and free! If you use them there’s more and, in turn, more money to spend in all sectors of economy. The poor could be seen as another large market and would build demand for a wider spectrum of the economy……. That’s how it would work better!

  5. Michael Fragale on February 9, 2010 at 12:34 am

    I believe that the stimulus would have done better had some been invested in alternate energy systems applied unilatterally. That is, if it were available to the poor sector, which it was not, and is not because the poor don’t have the means to purchase conventional solar arrays, for example, then these people would have the means to generate their own required power for heat and lighting . Then,in turn, have more disposable money which would create demand (stimulate economy?). Not to mention the demand for production of solar and or wind generating systems (stimulate economy?). Of course it would create jobs to produce this increased demand for product! Instead incentives were only afforded to the rich in the form of tax credits and, apparently, the rich care not about the cost of power. Evidenced by the absence of installations on rich people’s homes. Maybe tax dollars could be used to facilitate power generation on house tops of the poor instead of using LIHEAP which only really represents sbsidy to conventional power companies and doesn’t even cover the cost in winter months. Efficient?

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