August 29, 2021

Local Impact of the American Recovery Act

Anthony Tilghman
Anthony Tilghman, is an 2x Award-winning photographer, Education advocate, Mentor, and Published Author with years of experience in media, photography, marketing and branding. He is the Winner of the 2020 & 2021 Dateline award for Excellence in Local Journalism.

The American Recovery and Reinvestment Act of 2009 (ARRA), colloquially known as the Recovery Act, was a stimulus package passed by the 111th United States Congress and passed into law Barack Obama in February, 2009. The major goal of this federal Act, enacted in reaction to the Great Recession, would be to save current employment and generate new jobs as soon as feasible. Additional goals included providing interim assistance programs for people most impacted by the recession, as well as investing in education, infrastructure, renewable energy, and health.

At the moment of approval, the expected cost of the economic stimulus package was $787 billion, which was later amended to $831 billion through 2009 and 2019. The justification for the ARRA was founded on Keynesian economic theory, which states that throughout recessions, the state should counter the decline in private expenditure with a rise in public spending to secure jobs and prevent even more economic downturn.

The politics surrounding the stimulus were heated, with Republicans opposing the stimulus’s magnitude. Nonetheless, GDP ultimately improved steadily in the third quarter of 2009, encouraging hopes that the nation was exiting recession, and the jobless rate started to drop modestly throughout 2010. The federal and state governments soared, adding 590,000 jobs, contrary to the private sector job, which shed a further 2.7 million jobs to the 8 million jobs it had lost since the recession began.

Support programs for low-income homes and infrastructure investment were extremely expansionary, whereas education grants to states did not seem to generate many more jobs. Cross-state assessments of the stimulus’s impact, omitting education investment, show a per-job cost of less than $100,000. When education expenditures are factored in, it is estimated that one new job is created for every $170,000 spent on stimulus. Such economic surveys reveal that analysts are almost unanimous in believing that the stimulus lowered unemployment and that the gains surpassed the costs.

What’s more, The Recovery Act opened the ground for legislation through the Digital Accountability and Transparency Act of 2014 (the DATA Act), hence altering the rules for government expenditure openness and transparency. The DATA Act mandates that government agencies produce and report reliable, comprehensive data on the trillions of dollars they expend annually. Thus, every American citizen can now easily monitor and comprehend how the government spends their tax money.

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