Bush's U.S. stimulus package of 2008 will not be very successful.

Lets look at what is wrong with the economy before we determine the effect of the stimulus. 1) Housing bubble popped which led to the 2) Credit crisis which led to 3) Less shopping and income for the store which led to 4) Lay-offs The housing crisis allowed people to purchase more things through credit such as second mortgages or taking out equity. This led to a consumption boom that helped the economy. Eventually, people realized that these houses were not worth the prices they were going for and the bubble popped and prices fell. This happened just around the time the credit bills came home. Plus the bubble led to the subprime mortgages (low money down and high interest rates). This allowed people to but mortgages they couldn't afford, making the credit crisis even worse. Not to mention outrageous gasoline prices – this has created a sort of perfect storm that will push us into a recession. "Citigroup has announced plans to eliminate 21,000 jobs; investment banks in general will shed 40,000. The mortgage industry is in a state of meltdown; and Sprint--how did they get into this?--will lay off 4,000 full-time employees as well as 1,600 part-time and contract workers. " Plus there are the thousands of jobs that the airliners have laid off. The current package will provide most families with several hundred to one thousand dollars depending of family size. Lets assume that a family of four get $700. Where is this going to go? That's the most important question because were it goes determines the outcome. If it went to someone who has some debt (almost everyone who got the package) then it would most likely go to paying off that debt, therefore not putting it into the economy because it is essentially money already spent that's being paid later. If it is someone very financially stable and frugal, it will either go towards needs or a savings account. The poor and the unemployed would most likely spend this on necessities. But they are only a small portion of the population, hardly enough to compensate for the bad economy. These payments are also dwarfed by the sheer amount of lost money. Someone who has a second mortgage, lost their job, or is just generally feeling the burden of a stagnant economy isn't going to be helped with a couple hundred bucks. Moreover, just do they feel included, Congress also proposed an extension of the food stamp and unemployment programs. "Currently, the food stamp allotment amounts to about $1 per meal, and when four Democratic Congresspersons tried living on that for a week last May they ended up even crankier than if they'd had to sit through a week-long filibuster by Tom DeLay." "As for unemployment benefits: they last just twenty-five weeks in most states and end up covering only a third of people who are laid off." Any extensions of these programs would be insufficient unless they were given exorbitant amounts of funds, which Bush would not approve of. The stimulus package won't work because 1) The package doesn't concentrate on those most affected. 2) It doesn't provide adequate amounts of relief. 3) Doesn't eventually "fix" the credit, housing, or gasoline problem. It just gives a small and short break from those realities. Sources http://www.thenation.com... http://www.thenation.com...