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The American Recovery and Reinvestment Act of 2009

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The American Recovery and Reinvestment Act of 2009 was enacted on February 17, 2009. It was developed as a response to the economic crisis that was experienced in the United States and other parts of the world. It is a spending package that was pushed through Congress by President Barack Obama in order to stimulate the growth of the economy. An analysis of the American Recovery and Reinvestment Act of 2009 reveals that the Act has redirected funds to the whole of America as opposed to one state or some individuals (United States, 2010).

This paper looks at the benefits that have been experienced as a result of the American Recovery and Reinvestment Act of 2009 in education and the entire economy of the United States. The paper looks at the primary and secondary goals of the Act. It also states the short term and long term goals of the Act. The four guiding principles of the American Recovery and Reinvestment Act of 2009 are explained in the paper (United States, 2010). From this paper it is clear that tax credits have negligible effects on the consumption since people are likely to save or pay debts when there is plenty of cash instead of spending during unstable times.

The Recovery Act was developed having three immediate goals of saving existing jobs and creating new ones. The other goal of the Act was to propel economic growth and make long term investments. The third goal of the Recovery Act was to foster transparency and accountability in the government spending.

This stimulus package is used in spreading wealth around by redistributing money through taking it from one group of persons and giving it to others. The American Recovery and Reinvestment Act of 2009 since its initiation, has advanced reforms, supported education and created job opportunities by providing over one hundred billion dollars (United States, 2010). The funds are appropriated to various departments in the United States. It is important that people in the United States advance the short term goals of American Recovery and Reinvestment Act of 2009 and invest wisely using those funds.

The main goal of the American Recovery and Reinvestment Act of 2009 is to stimulate the growth of economy in the United States (Colorado, 2009). The Act has short term goals focusing on education, public services and health. The goals of the Act in education are aimed at ensuring success which can be achieved through collaboration between students, teachers and parents (United States, 2010).

According to the American Recovery and Reinvestment Act of 2009 some of the funding is directed towards the low income earners, retirees, job training and the unemployed. These persons are given the funds as grants or as unemployment benefits (Oklahoma, 2009). The funds are used in the development of infrastructure, promotion of healthcare, improving the quality of education, energy efficient and renewable energy programs, provision of homeland security and enforcing laws.

The primary goal of the American Recovery and Reinvestment Act of 2009 is to create jobs and have savings. The secondary objective of the Act is to provide programs offering relief to individuals impacted by recession (Oklahoma, 2009). Funds from the Act are required to be invested in education, health and infrastructure. The Act has also got projects that require long term spending such as ensuring improved teaching in schools and effective treatment in health care centers (Lanham, 2009).

There are four principles that guide on how the American Recovery and Reinvestment Act of 2009 funds are distributed. They include spending money quickly in order to save and also create jobs. These funds are usually distributed quickly across the states to all the deserving entities so as to avoid layoffs, create more employment opportunities and improve the achievement of students. It is required that states should have mechanisms on how to rapidly distribute their allocated funds to help drive the economic recovery of the nation (United States, 2010).

The second guiding principle of the American Recovery and Reinvestment Act of 2009 is that the funds need to be used in the improvement of students’ achievements via school reforms and improvement. The funds need to propel academic improvement among students regardless of the background throughout the United States (Lanham, 2009). This principle caters for all the learners including those with disabilities in ensuring that they have access to career ready standards and tracking progress and continuous improvement in schools. It also aims to ensure that teachers are effective where qualified teachers are distributed equally to all the students, especially to those students that are in need. Finally, this principle offers intensive support to those schools that perform poorly (Colorado, 2009).

The third principle of the American Recovery and Reinvestment Act of 2009 promotes accountability and transparency (Oklahoma, 2009). This is an effort to curb fraud and abuse of the funds. Recipients of the funds are required to accurately report how the funds have been used.

The fourth principle requires the funds to be invested in sustainable commitments even after the funding ceases. According to the American Recovery and Reinvestment Act of 2009, funding needs to be thoughtful to eliminate instances of unsustainability.

It is worth noting that refundable tax credits form part of the American Recovery and Reinvestment Act of 2009. The tax credits have negligible effects on the consumption since people are likely to save or pay debts when there is cash instead of spending during the unstable times (Lanham, 2009). It is clear that the Act causes higher taxes in the future. The consumption by the public negatively affects investment and growth whereas public investment usually has insignificant effects on the growth of economy (Colorado, 2009).

The American Recovery and Reinvestment Act of 2009 rationally emerged from Keynesian theory of macroeconomic. The theory suggests that for a government to save jobs, it is required to reduce the private spending and instead increase public spending. This is an effort to stimulate economic growth when the economy is deteriorating (Lanham, 2009). As per the American Recovery and Reinvestment Act of 2009, a balance has to be achieved for transparency, accountability and speedy investments. The fund distributing department is required to set several categories of funds. The funds are then distributed to states in various stages while some of those funds are distributed at once via a competitive grant process (CCH Incorporated, 2009).

Conclusion

In order to ensure long term economic improvement, there is the need for a distribution strategy that balances the need for economic stimulation and speedy investments. Effective education reforms and improvements are required to propel the United States of America. All agencies that have the allocated funds should quickly and thoughtfully plan on how they are going to use their funds (Oklahoma, 2009). According to the American Recovery and Reinvestment Act of 2009, prudent investments result to achievements. Success of the American Recovery and Reinvestment Act of 2009 will be determined by good management of all the people involved in order to restore America. It is important that people in the United States learn to invest wisely using their funds.

Recommendations

The tax cuts for the rich should be raised at the expense of the unemployed and the poor families. Finally, more funds should be allocated to the programs that create employment in the United States and loans should be made easily accessible to all people.

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