The problem, as Keynes concluded, is that a market driven economy is always …show more content…
The act achieved transfer payments through aid to citizens receiving little to no money. An increase in unemployment benefits, food stamps, temporary welfare payments, and social security payments allowed those who were not creating enough income to care for themselves or their families to have enough temporary money to do so. This part of the act allowed many Americans to get back on their feet after stumbling through the recession.
The American Recovery and Reinvestment Act of 2009 worked in Keynsian theory because of how much government spending it provided for the American people. Decreasing taxes, decreasing cost of basic needs, and providing money for those who didn’t have any allowed citizen’s disposable income to increase, spending on goods and services to increase, and therefore, a kick start in the economy.
Through examination of the growth of the economy, it is possible to conclude that the ARRA worked in stimulating the economy after the Great Recession of 2008. Gross domestic product is one way to see the economy’s recessions and inflations. From 1950 to 2007, the economy was growing at a fairly stead rate, increasing GDP by roughly $2,000 every 10 years. In 2008, there starts a steep drop in the slope, hitting its lowest in the second quarter of 2009. However, after this low point in 2009, the economy starts growing at the same, if not a better rate than it was before the recession. In this respect, the ARRA