An Economic Stimulus package is an attempt by the government to boost economic growth and lead the economy out of a recession or economic slowdown. In other words, by increasing consumer spending a recession can be reversed.
The main purpose of an economic stimulus package is to encourage consumer spending. The theory is that when consumers spend more, a recession can be reversed.
Specifically this is done by:
The American Recovery and Reinvestment Act of 2009 came about as a result of the global recession of 2008-2009. Basically it has involved a a $787 billion economic stimulus package, approved by Congress in February, 2009 and designed to quickly jumpstart economic growth, and save between 900,000-2.3 million jobs. The package allocated funds as follows:
The package was designed to be spent over ten years. However, to give maximum impact, $720 billion, or 91.5%, was budgeted for the first three fiscal years: $185 billion in FY 2009, $400 billion in FY 2010 and $135 billion in FY 2011.