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n interest rate, aggregate demand is forced to decrease. An example of the crowding out effect is the current lack of investment, such as fewer people are purchasing homes.

The American Recovery and Reinvestment Act of 2009 is looking towards an expansionary policy. The proof is clearly defined in the different measures associated with the bill. Being that the government is spending money at all in an effort to help the economy is an obvious sign of expansionary fiscal policy. The ARRA is pushing for an increase in government spending and decrease in taxes. These are two aspects that describe expansionary policy as explained in chapter 8.

The current United States government debt is set at 11.4 trillion dollars and steadily rising. Looking at the fact that the Obama Administration plans to spend an additional 787 billion dollars of what the government already doesn’t have, it is believed that this is not the best of ides. There are many concerns associated with the stimulus package and its long-term effects on the U.S. economy. The two main concerns being listed as the stimulus package not working, and even if it does work that the plan could still be problematic. More than anything the concern is that if the U.S deficit expands too quickly it will require the government to borrow internationally. According to the Council on Foreign Relations, “if the government starts borrowing internationally, it will in turn weaken the U.S. geopolitical strength and increase the risk of the U.S. defaulting in on its international debt and facing a true financial meltdown.” Adversely the stimulus plan has the potential to bring the community back to a normal state. Jason Furman, the senior economic advisor during Obama’s campaign, argues that the stimulus plan need be:

Timely so that it guarantees that spending affects the economy when it is needed the most, and in order to prevent overexpansion or rapid inflation

Targeted to ensure that ach dollar being spent is used to its maximum potential in the gross domestic product and helps the people most effected by the current state of the economy and,

Temporary in order to prevent unnecessary strain on the country’s budget in the long-run

Overall, many economist feel as though the stimulus package is headed in the right direction as it focuses on the many things affecting the people most effected by the country’s recession. Tyler Cowen, an economic blogger, recently wrote that Obama’s plan appears to take into account the frightening possibility of the U.S. defaulting on its international debt, in turn explaining why the stimulus package isn’t any larger.

In conclusion, we have to come to understand not only the overall purpose of the stimulus package but also the effects that it may have on the economy in the long-run. It has been brought to our attention that although the efforts of the stimulus package are to push the economy towards expansion, it is going to require the members of this country to be more optimistic about the economy. The measures established in the American Recovery and Reinvestment Act of 2009 provide information regarding the expected direction the U.S. government is pushing for本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。