EVALUATE THE EFFECTIVENESS OF THE STIMULUS PACKAGE FOR THE U.S. ECONOMY

Evaluate the effectiveness of the stimulus package for the U.S. economy



Evaluate the effectiveness of the stimulus package for the U.S. economy

The Federal Reserve on Tuesday expressed concern about low levels of inflation and said it would provide more support to lift economic activity, probably alluding to a new stimulus package after massive fiscal stimulus plan is almost $ 800 billion approved by Congress early last year.

However, members of the Federal Open Market Committee (FOMC) kept key interest rates close to zero and postponed taking any new steps to boost economic recovery.

The Fed, however, are ready to provide additional space if needed to support economic recovery and the return of inflation, over time, to levels in line with its mandate. "

Although it is believed that the pumping of new money can lift the economy, critics question the effectiveness of another stimulus package of taxpayer money, given that the previous program appears to have failed.

In fact, the Fed itself acknowledged the sluggish growth in economy. Information, obtained after the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months. Expenditure of the population has gradually increased, but remains constrained by high unemployment, modest revenue growth, lower housing wealth, and tight credit, the Fed said in a statement issued on 21 September.

Business spending on equipment and software is growing, albeit at a slower pace than earlier in the year, while investment in nonresidential buildings, structures continues to be weak. Employers are still reluctant to add payroll. Housing starts are at a level of depression. Bank lending continues to decline, but at a reduced price in recent months, "the statement said. Instead, FOMC expects a gradual return to higher levels of resource ...