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Although the fiscal stimulus package of 2009 was a fairly conventional fiscal policy given the circumstances, it had serious implications for the US economy and the political system.
First, the fiscal stimulus at least arguably saved the economy from going into a truly deep recession. At the end of 2008, that economy was crashing badly. Something needed to be done. Most economists believe that the stimulus package at least saved the economy from going down more precipitously. In this sense, it was good for the country.
Second, however, the fiscal stimulus has caused a great deal of trouble for the country both economically and politically. Politically, it came at a bad time and from a bad source. The “Tea Party” was already extremely angry about things like the Wall Street bailout and the deficit caused by the stimulus made them even angrier. Add this to the fact that it was proposed by a president whom they despised, and things got even worse. This has helped contribute to the political paralysis that we now face.
The political paralysis causes economic harm as well. The government’s deficits and debt, thanks in part to the stimulus, are getting to be unsustainable. The political paralysis prevents anything from being done. This makes the country look less stable and causes great nervousness on the part of many investors and businesses. This hurts our economy.
Thus, the stimulus had some good effects, but it has also had some very negative consequences for our economic and political systems.
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