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Track the Stimulus looks to provide clarity on the different programs launched by federal and local governments to re-ignite the economy.
While in 2008 most government efforts were directed towards regaining a modicum of stability in the financial markets, in 2009 the new Obama administration is implementing programs directed towards stimulating demand and creating (preventing the elimination) of jobs in the broader economy. Track the Stimulus details where these investments are made, what jobs are being created and where, and attempts to measure whether these programs are achieving what they sought to achieve whether that is creating jobs, lowering the cost of borrowing to banks and corporations, etc.
The H.R. 1, American Recovery and Reinvestment Act of 2009 is now part of history - the President signed the bill into law on February 17, 2009, and now the task is to put it into action. The $787.2 billion stimulus plan is the largest in history. It calls for $308 billion in discretionary spending, $233 billion in tax credits and incentives for individuals and $192 billion in direct aid to states, unemployed and for the adoption of health care IT. The vote followed strictly party lines at the House and in the Senate the 3 moderate republicans that supported the Senate version, also supported the compromise version. Funding under the bill has already started flowing to state and local entities, and several federal government agencies have announced solicitations/request for proposals for grants supported by stimulus spending.
Through a combination of tax cuts, direct investments in a variety of sectors including infrastructure, energy, science and education and help to the unemployed and to the states, Congress and the President are looking to alleviate if not stop the decline in economic activity that started in late 2007. Since the recession started over 5.1 million jobs have been shed across most sectors of the economy. The Obama stimulus plan hopes to create or avoid loosing 3 to 4 million jobs.
The credit crunch that started in July 2007 and became progressively worse to culminate in mid September into a full blown liquidity crisis has caused a sharp contraction in economic activity. In early October, at the request of the Treasury, Congress passed the TARP to provide liquidity to the banking system and avoid a full blown meltdown of the credit markets. In that respect the TARP, and concurrent efforts by the Fed worked as the credit markets have thawed. By March 2009, the government has allocated $565.5 billion of the $700 billion that Congress approved for the program. There are still many headwinds and credit is still very restricted at the bank level, and has all but stopped in many of the securitized markets that had provided a large level of the liquidity to the economy before the current contraction - Fed and Treasury are working towards bringing normalcy to the securitization markets through the "Financial Stability Plan" (TARP II if you will) is the Obama administration's strategy to heal the credit markets. It calls for:
The government released details of its homeowner bailout program. It will help people refinance their mortgages when they are not eligible because of decreases in the value of their residences. It also calls for a $75 billion "housing stability initiative" to help 3-4 million "responsible homeowners" avoid foreclosure (well the "responsible" part is probably open to discussion) by reducing payments on their loans through subsidies by Treasury and the lenders; it also encourages banks to reduce principal on the mortgages of people in trouble, and asks for bankruptcy lawyers to be able to modify mortgages (cram-down type of solution). Finally, the government will inject funds through the Treasury to Fannie Mae and Freddie Mac to keep mortgage rates low.
In addition to lowering its benchmark interest rates, the Federal Reserve has displayed a great amount of innovation while fighting to keep credit markets from seizing up. A whole alphabet soup of programs have been introduced to help struggling financial institutions keep lending. These programs for the most part provide liquidity to depository institutions and primary dealers facing difficulties and short-term liquidity strains to continue operating normally and providing lending to consumers and businesses. Perhaps the most far reaching of those is the "Term Asset-Backed Securities Loan Facility" (TALF), which is targeted to provide liquidity into the markets for consumer and small business lending, and which opens the Fed's window to most kinds of financial institutions including hedge funds and provides them with a cheap source of capital to fund high-quality consumer lending.
In early 2008, Congress and then President Bush passed a $168 billion tax reimbursement to stimulate spending - it did not work out quite as expected as many people decided to keep the money they received, rather than spend it. In the face of deteriorating economic conditions, several initiatives were introduced by Congress, states the FDIC, and other government agencies to extend unemployment benefits, facilitate workouts of existing mortgages, etc.
Wall Street Journal's stimulus package pages - contains links to the articles published by the WSJ regarding the stimulus and other related information.
Recovery.gov - is the official government site that tracks spending on the American Recovery and Reinvestment Act of 2009. All federal, state and local agencies are mandated to enter their information on stimulus pending on the site.
FinancialStability.gov - is the official Treasury site on the Financial Stability Plan.
MakingHomeAffordable.gov - is - the official government site targeted to help homeowners figure out whether they qualify for a loan modification, or refinancing. It provides links to important resources.
Information on this page is provided courtesy of TrackTheStimulus.com. More detailed information on the stimulus can be found on that site. All rights reserved.