Write An Essay Of About 250–300 Words Comparing The American
Write An Essay Of About 250 300 Words Comparing Theamerican Recovery A
Write an essay of about words comparing the American Recovery and Reinvestment Act of 2009 and the Tax Cuts and Jobs Act of 2017 . Explain the differences and similarities between these acts, focusing on the economic circumstances in which they were enacted and the objectives that the government pursued. Investigate what were the effects of these government policies on the US economy, as well as on long term public debt.
Paper For Above instruction
The American Recovery and Reinvestment Act of 2009 (ARRA) and the Tax Cuts and Jobs Act of 2017 (TCJA) are two significant legislative measures aimed at shaping the economic landscape of the United States. Despite both being government interventions in the economy, they were enacted under markedly different circumstances and pursued distinct objectives, resulting in diverse impacts on the economy and public debt.
The ARRA was enacted in response to the severe economic downturn following the 2008 financial crisis. Its primary objective was to stimulate economic activity, preserve and create jobs, and prevent a deeper recession. The act included substantial government spending on infrastructure, education, healthcare, and renewable energy, alongside tax benefits aimed at boosting consumer spending. Conversely, the TCJA was enacted during a period of economic growth, with the aim of addressing long-term fiscal issues, primarily through tax reform. Its main objectives included simplifying the tax code, encouraging business investment, and reducing the overall tax burden on individuals and corporations to promote economic growth.
The effects of these policies diverge notably. The ARRA contributed to stabilizing the economy in the short term by increasing government expenditure, which supported employment and consumer confidence. However, it also substantially increased the national debt, with estimates suggesting that the act added over a trillion dollars to federal deficits. On the other hand, the TCJA spurred short-term growth by lowering taxes and incentivizing investment, but its long-term impact on public debt is concerning, with projections indicating it could add gradually to the national debt over time due to lower revenue and increased deficits.
While both acts aimed to stimulate economic growth, their different contexts and strategies resulted in varied outcomes. The ARRA focused on immediate economic stabilization through government spending, leading to increased debt but short-term economic recovery. The TCJA aimed to promote investment and growth through tax reform, with less direct government expenditure, though it has contributed to long-term debt concerns. Both legislation reflect the balancing act between fostering economic growth and managing public debt that continues to challenge policymakers.
References
- Congressional Budget Office. (2015). The Budget and Economic Outlook: 2015 to 2025. Washington, DC: CBO.
- Council of Economic Advisers. (2010). The Economic Impact of the American Recovery and Reinvestment Act. The White House.
- Mertens, K., & Ravn, M. O. (2019). Fiscal policy in times of COVID-19. Review of Economic Dynamics, 35, 1-24.
- Tax Policy Center. (2018). The Effects of the Tax Cuts and Jobs Act: A Preliminary Look. Urban Institute & Brookings Institution.
- Congressional Research Service. (2018). The Tax Cuts and Jobs Act: An Overview. RL33814.
- Cogan, J. F., et al. (2016). The Effects of the Tax Cuts and Jobs Act of 2017 on Long-Term Economic Growth. National Bureau of Economic Research.
- Department of the Treasury. (2019). The Impact of Recent Tax Legislation. U.S. Government Publishing Office.
- Blinder, A. S. (2010). What the Data Say about the Recovery Act. Brookings Papers on Economic Activity.
- Auerbach, A. J., & Lerner, A. (2019). The Long-Run Effects of the Tax Cuts and Jobs Act. Journal of Economic Perspectives.
- National Bureau of Economic Research. (2020). COVID-19 and Fiscal Policy: A Review.