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Inside the American Recovery and Reinvestment Plan: The 2009 Economic Stimulus Package

Written by Nickel - 22 Comments

I had every intention of writing up a detailed summary of the so-called “American Recovery and Reinvestment Bill of 2009” this morning, but when I took a look at the House Appropriations press release, I was overwhelmed.

According to the press release, the package contains $275 billion in economic recovery tax cuts and $550 billion in “thoughtful and carefully targeted priority investments with unprecedented accountability measures built in.” The efforts are targeted to areas such as:

  • Clean, efficient, American energy
  • Transforming our economy with science & technology
  • Modernizing roads, bridges, transit, and waterways
  • Education for the 21st Century
  • Tax cuts to make work pay and create jobs
  • Lowering healthcare costs
  • Helping workers hurt by the economy
  • Saving public sector jobs and protecting vital services

While I realize that $825,000,000,000 is a lot of money, I was still taken aback when I saw that the “Executive Summary” of this plan spans 12 jam-packed, typewritten pages. Given the number of zeroes involved, I probably shouldn’t have been surprised, but I was. It’s also worth noting that there’s no mention of a second stimulus check.

Anyway, I encourage you to at least skim over the summary and to share your thoughts. I’m guessing that I’m not the only one having trouble getting my head around the implications of all of this. I’ll say this much… At least it looks like they have a plan, which is more than I can say for the original bailout package.

Update: A visual representation of the proposed spending. Thanks Brack!

Published on January 28th, 2009
Modified on February 5th, 2009 - 22 Comments
Filed under: Economy

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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22 Responses to “Inside the American Recovery and Reinvestment Plan: The 2009 Economic Stimulus Package”

  1. 1
    Jeff - StretchyDollar Says:

    Wow – you’re right – that summary is jam-packed. I saw that they’ve planned for $15.6 Billion for Pell Grants – that’s great news for students. Very interesting.

  2. 2
    DebtFREEk Says:

    Basically this plan outlines the continued efforts our government is taking to create a new Socialist state that was once the great, Godly nation of The United States of America.

    The last thing we need is more government control over anything, but what we will get is more governmental control over everything.

  3. 3
    Ben Says:

    Looks like Jim over at Bargaineering (formerly BFP) actually took it on…

    http://www.bargaineering.com/a.....tails.html

  4. 4
    nickel Says:

    Ben: Yep, but guess who pointed out the press release to him? ;)

    Plus, I have a job! 8)

  5. 5
    Ben Says:

    No judgement here… Love your work, just giving a heads up. (realized that sounded a little snarky after I wrote it… oops :P )

  6. 6
    Jim Says:

    I can already feel the clumsy hand of government reaching for my wallet to pay for their drunken spending spree on the road to Squandersville. It’s ironic that sites devoted to personal frugality would cast a favorable light on such a power grab into the private sector by the social engineers in Washington. Whenever I hear the word “investment” coming out of the mouth of politicians, I know they are funneling pork to their supporters and numerous special interest groups.

  7. 7
    Brack Says:

    A commenter on opencongress.org found a good detailed breakdown of where the money is going:

    http://www.propublica.org/spec.....ll-treemap

    I’m just still trying to find out why they are calling it a stimulus package…

  8. 8
    David Says:

    I think it’s funny that this plan is considered “socialist” by some people after watching what the government has been doing with your tax dollars for the last couple of months with the bailouts. Where was the crying when Bush was handing out billions to corporations and CEO’s? At least some of this money is going towards actual projects that need help.

    Socialism is OK when it benefits corporations and the wealthy but not the rest of us; I think I am starting to understand now.

  9. 9
    Steve Says:

    I agree with DebtFREEk that this is only the beginning of creating a Socialist state.

    Turning our society into one that expects entitlements is just a bad direction. I’m tired of hearing “Only government can help…”. What has the government been effective in running (Amtrak, USPS, IRS, SS, etc.)?

    Most of the items in this proposal won’t be effective in stimulating the economy anytime soon. How does clean, efficient, American energy when gas is so cheap help us create new jobs this year? This bill should be “American Recovery” only at this point and then start working on the future part.

    This is a matter of our representatives trying to get items that don’t have anything to do with a stimulus into the package.

    They are confusing what needs to be done now to help the economy with items future things that should be presented in separate legislation.

    Don’t forget the new head of the Treasury, Timothy Geithner, has been instrumental in the previous bailout for several months along with Bernake and Paulson.

  10. 10
    WiseMoneyMatters Says:

    I still have mixed feelings on this.

    I don’t think that the solution to an economic crisis in which we got carried away with too much debt is to get the government further into debt.

    On the other hand, I like some of these things. I’m all for renewable energy and improving our school systems. Science and technology are also up there, but I’m not necessarily so keen on the tax cuts.

    It’s the same issue I had with Bush. He wanted to reduce taxes but increase spending. That’s a bad business plan.

    Personally, I’d like to see extremely strict regulation on debt. I don’t think we should put more people into their own homes like Obama wants to do. I think we should actually have less people owning homes. Only those that can actually afford homes preferably. Is that such a novel concept?

    I dunno. I go back and forth on Obama’s upcoming policies.

  11. 11
    DebtFREEk Says:

    @David:

    The plan is not “considered socialist by some people”. Rather, the plan is indeed the practice of Socialism. This is neither opinion nor conjecture, simply the practical application of words according to their literal definition.

    Arguing that there was nothing wrong with the policies of the Bush administration would be like trying to fit a camel through the eye of a needle. However an accurate question is; why was this point brought up as if to argue that others had written any comment to the contrary?

    Regardless of where the money goes, Socialism is Socialism just as opinion is opinion just as this article was written regarding the current bill and nothing else.

  12. 12
    g Says:

    To all you who ‘worry’ we are becoming a Socialist state:

    1) Sure: let’s leave it the capitalists to run things: The great capitalists, like the CEOs of all those great, “business is efficient” corporations – Bear Stearns, Merrill Lynch, AIG, Enron. Yeah, government isn’t efficient. . .

    2) Read the U.S. Constitution – the role of the government is to, “… provide for the common defense, promote the general welfare…” Yes – the role of a government is to do things for people, to ensure there is not a power vacuum which inevitably leads to a situation where the wealthy, with their money, usurps power.

    3) Stop listening to AM radio – you guys are so brainwashed

  13. 13
    DebtFREEk Says:

    …Yes – the role of a government is to do things for people, to ensure there is not a power vacuum which inevitably leads to a situation where the wealthy, with their money, usurps power.

    It’s not a little-known-fact the emboldened print above is exactly what the American people people are facing today. If an individual is unaware of the private banks that run the governments of the world (the American government one among many), I have sincere sympathy for such benightedness! A simplistic example of this current truth is shown in a brief study of political party power over the course of this nation. Take the Republican party; formed in 1854 only to see it’s candidate elected president seven short years later in Abe Lincoln. In sharp contrast, currently a 3rd party couldn’t gain a foothold if Christ Himself ran as their candidate.

    As citizens of this country, we need not be disunited in the knowledge of the former, rather strongly embraced in uniform disgust against a tyrannical oppressor.

    My last point moves me to request it possible for each of you to keep your comments constructive without adding a sarcastic insult to the other commentators, who seem to be sticking to a professional & respectful discussion regarding the topic at hand.

  14. 14
    Sandwich Says:

    I don’t think that the bailouts or stimulus while Bush was in office were a good idea either. It doesn’t matter who is doling out the money.

  15. 15
    DebtFREEk Says:

    @Terry:

    I couldn’t agree more.

  16. 16
    JoeJ Says:

    Considering the mess the “W” administration, with its espousal of maximal deregulation plus tax cuts for the top income brackets, has left us I say “If this be socialism, make the most of it!” Actually, it isn’t true socialism but rather a move toward social responsibility. The package isn’t perfect but, as the saying goes, (the search for) the perfect is the enemy of the good. I’d prefer to see far less in tax cuts (which may be popular, but don’t put people to work) and much more in infrastructure (not only rail, light rail, green energy, bridge and highway construction/maintenance, but also water treatment, sewage treatment, etc.). With tax-cut mania pervading every level of government for the past eight years we’ve neglected infrastructure to a criminal degree – and now we must pay the price.

  17. 17
    Mike Says:

    Lately I’ve been thinking I subcribe to too many frugal-focused and debt eliminating newsletters, and that perhaps I should unsubscribe to a few. Today’s column probably seals the deal for FCN and me.
    I cannot understand how anyone except one blinded by partisan politics or by Obama’s fabulousness can believe that there is something – anything – in that bill that will actually HELP STIMULATE THE ECONOMY. The bill is nothing but the Congressional equivalent of how kids act up in high school when the substitute teacher arrives.
    I got a kid in college. Either we pay, she gets a scholarship, she takes out loans, chooses a less expensive school, or she works so she can go to college. (As one of hundreds of possible examples) I really, really don’t want any of you folks helping me and her to finance her education through more generous offers of public money, and I sure as heck don’t want to be paying higher taxes to support neither yours nor your kids schooling.
    Y’know, this spending in this plan are the kinds one might expect to see if the economy actually had a surplus and the government thought it would be nice to improve government services and programs. History shows that there are proven ways to stimulate an economy, and all those ideas are based on capitalism, not socialism like the plan our Congress has drawn up. God help us all.

  18. 18
    nickel Says:

    Jim (Comment #6) and Mike (Comment #19): I’m curious where you got the sense that I was singing the praises of this measure. I was simply pointing out the summary document and encouraging people to read it. The subtitle stems from that fact that this has been promoted as a “stimulus package,” and that it’s shockingly massive (hence the “whole lotta” bit). The only thing that I said above that was remotely positive was that I’m glad that there’s at least a plan this time around. I say that not because I necessarily support what’s in this bill, but rather because this past fall we were essentially told to hand over $700B without any explanation of exactly how it would be used. At least this time around it’s possible to see what’s being proposed and formulate an educated opinion.

  19. 19
    thomas Says:

    This is not a stimulus package as very little involved in the bill will have an impact on the problems of today. By the time these agendas are implemented, the recession will be over yet we will be strapped with bigger government, a majority of voters with no tax liability, and policies designed to choke out the free market.

    Don’t put lipstick on a pig and tell me it’s the prom queen.

  20. 20
    GhostOfRusticus Says:

    > History shows that there are proven ways to stimulate an economy, and all those ideas are based on capitalism, not socialism like the plan our Congress has drawn up.

    Well, the capitalists all say that the way to improve the economy is to give tax-cuts to the rich. Of course, that was tried in the 80’s, and we got a recession. Is was tried in the 00’s and we got a recession (if we’re lucky). So I’d say the only thing history has taught us is that capitalists will do everything in their power to get people to hand over more money to them, and that government has been the most effective tool to do that.

    Free enterprise and private ownership are great, but since capitalism limits both I say: good riddance. Let the mismanaged corporations fail. The US was founded by people who refused to live under the capitalist rule of the (familiarly mismanaged) East India Company (which also got tax cuts in the form of the Tea Act). It’s time for us to return to those roots. No more bailouts; let’s just let capitalism die. It’s long overdue.

  21. 21
    LK Says:

    I believe that those who are yelling “Socialist” or “Socialism” are lucky enough to be employed (most likely in high end positions), unlike many of this country’s hard working, manual labor individuals. I worked many years as a well paid paralegal (and yes, I have been a hardworking employee since the tender age of 14), only to become disabled and finding myself earning a minimal amount of income each month on disability. Due to the long term waiting period of Social Security, we found all our savings and investment income eaten away in an attempt to retain our home and vehicles (which until then, we were perfectly capable of maintaining), ultimately losing everything we had worked so hard for. Now, my husband has been laid off and our income further reduced as a result. I find the stimulus package beneficial for those of us living on the cusp of disaster, but I am sure those not living with the daily fear of losing the roof over their heads, are incapable of relating to our fear and seeing the good that Obama’s package provides for those in our position. God bless America and our President for not forgetting those of us who have paid into our system for so long, and who now find ourselves in need of a helping hand.

  22. 22
    Machine Gun Trust Says:

    It is the global reality we face with virtually all governments now in deficit. I cannot remove the impact of the global recession on jobs but by Government action we can reduce it.

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