2009 - Detail

October 31, 2009 - The economic recession continues to deepen as jobless claims climb above 10.0%, reaching 10.2% with October's monthly figures. This occurs despite efforts by the Obama administration to ramp up massive government spending pushed by the $780 billion economic stimulus package passed earlier in the year.

The subprime mortgage crises had caused it during the George Bush, the Youngers, administration. Speculative mortgages by big banks and financial firms had caused a housing price collapse, and spun the economy into a tailspin. It was a large reason why President Barack Obama, a first term Senator from Illinois, had won the 2008 election. While it would not be he to blame; it would be up to Obama to attempt to correct it.

One tool used was the The American Recovery and Reinvestment Act of 2009, a $780 billion dollar economic package (upgraded to $831 billion over the next few years) of government spending meant to spur the economy. The bill was sponsored by David Obey in the House and Harry Reid in the Senate. It was an extremely long bill, see preamble and index below, which Republicans could not support. No Republicans in the House of Representatives voted for it; only three in the Senate. Yes, this was part of the start of extremely partisan politics. Nice to see we haven't correct that problem into 2025. However, it did pass (244-188, House, and 61-37, Senate), and was signed into law by President Obama on February 17, 2009. The goal of the package was to halt the recession and keep unemployment under 8%.

The money in the package was spread around various areas meant to help the American citizen: $288 billion for tax relief, $144 billion for state and local fiscal relief, $111 billion for infrastructure and science, $81 billion for protecting the vulnerable, $59 billion for health care, $53 billion for education and training, $43 billion for energy, $8 billion for other expenses.

Response of the Unemployment Rate

The economic recession had been causing businesses to cut employees on their payroll since 2008. In some cities, in early 2009, such as Fort Elkhart, Indiana, the unemployment rate had reached 15.3%; in Fort Myers, Florida, it was 10%. Overall unemployment rate for January 2009, reported in February, for the entire United States was 7.6%, later changed to 7.8%.

However, as with most government spending programs, the money would not be spent quickly or, sometimes, wisely, with much government waste and bureaucracy taking its toll. So while many of the programs, some said, would eventually help the economy, they did not assist in 2009. Others contend, it did not help at all, only leading to an increased deficit. In March 2009, the stock market hit its bottom. The deficit had been $223 billion in February, which was higher than the total deficit for the previous nine years. The stimulus over the next two years did create jobs, however, the money spent to create the 2.6 million to 6.1 million estimated jobs came to $128,000 to $300,000 per job.

In the year 2009, the monthly unemployment rates were ...

January - 7.8 percent.
February - 8.3 percent
March - 8.7 percent.
April - 9.0 percent.
May - 9.4 percent.
June - 9.5 percent.
July - 9.5 percent.
August - 9.6 percent.
September - 9.8 percent.
October - 10.0 percent.
November - 9.9 percent.
December - 9.9 percent.

It would take until October 2012 until the unemployment rate targeted by those who passed the stimulus bill to be below their target of 8%. Now, there are those within the Keynesians that claimed it worked as planned, however, to have reached that goal, the stimulus had to be larger. We will let you decide for yourself whether The American Recovery and Reinvestment Act of 2009 did its job, or did it efficiently or effectively.

The American Recovery and Reinvestment Act of 2009

Public Law 111-5, 111th Congress, An Act

Making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for the fiscal year ending September 30, 2009, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``American Recovery and Reinvestment Act of 2009''.

SEC. 2. TABLE OF CONTENTS. The table of contents for this Act is as follows:

DIVISION A--APPROPRIATIONS PROVISIONS

TITLE I--AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES
TITLE II--COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES
TITLE III--DEPARTMENT OF DEFENSE
TITLE IV--ENERGY AND WATER DEVELOPMENT
TITLE V--FINANCIAL SERVICES AND GENERAL GOVERNMENT
TITLE VI--DEPARTMENT OF HOMELAND SECURITY
TITLE VII--INTERIOR, ENVIRONMENT, AND RELATED AGENCIES
TITLE VIII--DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND RELATED AGENCIES
TITLE IX--LEGISLATIVE BRANCH
TITLE X--MILITARY CONSTRUCTION AND VETERANS AFFAIRS AND RELATED AGENCIES
TITLE XI--STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS
TITLE XII--TRANSPORTATION, HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES
TITLE XIII--HEALTH INFORMATION TECHNOLOGY
TITLE XIV--STATE FISCAL STABILIZATION FUND
TITLE XV--ACCOUNTABILITY AND TRANSPARENCY
TITLE XVI--GENERAL PROVISIONS--THIS ACT

DIVISION B--TAX, UNEMPLOYMENT, HEALTH, STATE FISCAL RELIEF, AND OTHER PROVISIONS

TITLE I--TAX PROVISIONS
TITLE II--ASSISTANCE FOR UNEMPLOYED WORKERS AND STRUGGLING FAMILIES
TITLE III--PREMIUM ASSISTANCE FOR COBRA BENEFITS
TITLE IV--MEDICARE AND MEDICAID HEALTH INFORMATION TECHNOLOGY; MISCELLANEOUS MEDICARE PROVISIONS
TITLE V--STATE FISCAL RELIEF
TITLE VI--BROADBAND TECHNOLOGY OPPORTUNITIES PROGRAM
TITLE VII--LIMITS ON EXECUTIVE COMPENSATION

Photo Above: President Barack Obama Signing the Recovery Act, February 17, 2009, Paul Souza. Courtesy Whitehouse.gov via Wikipedia Commons. Image below: Highway sign in Colorado announcing the Recovery Act paid for that project, 2010, DReifGalaxyM31. Courtesy Wikipedia Commons. Info source: govinfo.gov; "The 2009 Stimulus Package Explained," neighborhoodlink.com; "Obama's Stimulus Precluded a Robust Economy," 2011, Richard Salsman, Forbes.com; Bureau of Labor Statistics; Wikipedia Commons.

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