The Economic Stimulus Act of 2008 was put into action on the 13th of February in 2008. This Act was passed by Congress in an attempt to make provisions for many types of aid to the declining economic conditions. As such, the main goals were to create conditions that would stimulate the economy while overall the economy could certainly avoid a further recession or serious depression. The stimulus package was originally passed by the United States House of Representatives a couple of weeks before the Economic Stimulus Act was passed.
The package was changed in minor ways before approval. Demand from the majority of the Democratic and Independent parties played a strong role in the speed of this process, while a smaller demand from the Republican party also had some effect. The Act allows for new tax rebates to be issued to low and middle-income earning taxpayers, as well as several tax incentives for favorable conditions in business investing. Furthermore, the law creates a raise in the limits created in mortgages eligible for buying through enterprises sponsored by the government.
This bill was estimated to cost $152 billion for 2008. While many hoped this bill would have a significant impact on the credit crisis, the current view is that it will not have a significant impact, and further changes are needed so these economic stimuli can positively affect the credit crisis.
Many demands are evident in today’s economic world. On the top of the list in priorities is the demand for organizations to distance themselves from the conductive method of the following direction to a more focused overall development of traditional business processes. The way which this will occur in the business world in the present situation seems to involve more of an ability to adapt to the changing conditions rather than pure strength and resolve.
The stimulus intentions put into action by the government have been helping since they have been in motion however they have yet to create serious positive changes in the business world. Many do not foresee this occurring shortly for business or credit-minded consumers, or anyone specifically affected at all for that matter, while still more worry that there is no tangible solution within reach. The amounts set aside for more government spending in 2009 for nonresidential projects is not enough to make any difference, in one case, while the substantial component of the stimulus aimed at interstate work is commonly referred to as “a drop in the bucket.”
Many experts see the fall of the bond and credit markets for the financing of more projects as one of the primary concerns that are keeping new projects from being successful. Overall, it is commonly agreed that the credit issues which have been becoming more and more apparent wholly do not even compare with the stimulus package’s intentions. The sources that could pay for such a solution are simply not available.
Yet another issue negatively impacting the capability to fund additional projects taking place and credit is the mortgage issues. The number of loans that will be due for properties over the next few years will be shocking or crippling. Many of these include properties that have been strained monetarily already, while banks so highly leverage and credit cannot help as the portfolios for real estate loans becoming inactive and delinquent. The problems are interrelated, and since the credit crisis must be fixed for the next projects to take place, the solution to the problem seems to also be a problem, while the initial stimulus toward the final solution cannot incite what it had intended to.
Regarding a more general business viewpoint, experts agree that the present recession in the economy is in fact more serious than other recent recessions, such as the one in 2001. Recent studies reveal billions will continue to be lost under the current circumstances, inciting the need for severe cutbacks in design organizations. While growth has been interrupted or entirely halted, financing is not available to normal standards which, even with the stimulus, is freezing most actions to better itself or in some cases to even maintain itself.
Many experts are suggesting another economic stimulus package, one which has a greater potential for resolving the credit crisis among other problems. As credit seems to have such an immediate effect on the business processes and cycles required to amend the current business and real estate situations, the new program should have an emphasis and design towards an immediate effect on credit while catering to increased general access to credit. While the economy is predicted to remain weak for many quarters to come, government spending and taxing seem to be fully encouraged in the business realm, as it is even more so encouraged by Democrats.
The economy is still at risk to be slowed, while a new stimulus that has a more specific emphasis will be required to take the actions that the first one was not able to. Credit has played a significant role in the modern business processes of recent times, and this was apparently not given adequate consideration on a conceptual level in the formation of the original stimulus bill. While the White House has already been rejecting such calls for a second stimulus bill, the arguments that the first stimulus bill needs more time are becoming less persuasive. As the global crisis becomes more apparent, this rejection is becoming less immediate while some officials have shown signs that they support another stimulus.