There were two so-called "stimulus" programs. One under President BUSH. The Economic Stimulus Act of 2008, The law provides for tax rebates to low- and middle-income U.S. taxpayers, tax incentives to stimulate business investment, and an increase in the limits imposed on mortgages eligible for purchase by government-sponsored enterprises (e.g., Fannie Mae and Freddie Mac). The total cost of this bill was projected at $152 billion for 2008. The 2nd under President OBAMA — the American Recovery and Reinvestment Act of 2009 or ARRA. The approximate cost of the economic stimulus package was estimated to be $787 billion at the time of passage. The primary objective for ARRA was to save and create jobs almost immediately. Secondary objectives were to provide temporary relief programs for those most impacted by the recession and invest in infrastructure, education, health, and ‘green’ energy. The Act also included many items not directly related to economic recovery. Was it successful? Depends on whom you ask, of course. Conservatives will say unemployment is near double-digits and growth is slow, so clearly it didn’t work. Liberals will say yes, unemployment is too high but that’s just a sign the stimulus wasn’t big enough. It worked when you think about how much higher unemployment would have been without it. And, come to think of it, we need more stimulus. Each side can find facts and models to fit its worldview. See the debate below.

A Chronology of the Financial Crisis

from NCPA,

Homeowners witnessed a steady rise in U.S. interest rates from 1 to 5.45 percent in 2004. Owners of subprime mortgages began defaulting. By 2006, defaults on subprime mortgages rose to record levels. Even though evidence of the impending crisis emerged years earlier, most Americans did not recognize the United States had a financial problem until 2007 according to Dennis McCuistion, task force leader of the NCPA's Financial Crisis Initiative.

Two major subprime lenders filed for Chapter 11 bankruptcy in 2007. Freddie Mac announced it would no longer buy risky subprime mortgages or mortgage-related securities. In July it was reported that as much as $100 billion in losses could occur on subprime loans attached to national lenders. - Goldman Sachs earned $4 billion in 2007 by betting securities backed by risky home loans would fall in value. The firm admitted to providing investment ideas that it had already traded on, sometimes betting against the investments it recommended to clients. - The Census Bureau announced new home sales in November 2007 were down 34 percent from November 2006. This was the largest decline since 1991 during a previous recession. - In March 2008, Bear Stearns reached the brink of bankruptcy and the Federal Reserve lent it money. On September 15, 2008, Lehman Brothers filed the largest bankruptcy in U.S. history. The U.S. government took over American International Group the next day. AIG had guaranteed hundreds of billions of financial instruments issued by Lehman. The Treasury Department feared AIG's failure to meet its obligations would create a global financial meltdown and provided an $85 billion loan. By September 18 2008, Paulson requested Congress approve the purchase of distressed assets from financial companies. In October, Congress approved the $700 billion bailout plan. Many questioned the constitutionality of such a move.

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