Question

Discuss the implications of the stimulus package for the United States. In light of the benefits derived from Europe's safety net, discuss the pros and cons of America's adoption of European policies, such as universal health care and job protection.

Answer 1

The implication of stimulus package for United States contained huge array of tax break and spending projects,aimed at vigorous job creation and a swift revival of US economy.Stimulus Package Money allocated by governments to financial institutions and selected industries to prevent their collapse and reinvigorate economic growth.Responses to the global financial crisis varied from country to country, with the strongest actions occurring in the United States. In a sharp reversal of its strong commitment to economic and financial liberalization and free-market capitalism, the United States has led efforts to nationalize its financial and some aspects of its manufacturing sectors to an unprecedented degree. There was general consensus among Republicans and Democrats that a massive financial and economic stimulus package, was essential not just to rescue America’s financial institutions but to reassure Americans that their savings and investments were secure. A $787 billion stimulus package was passed by Congress. Because the financial crisis was reminiscent of the Great Depression, with its high levels of unemployment and massive withdrawals from banks, the U.S. government responded to avoid repeating the mistakes of the 1930s.

The pros and cons of America's adoption of European policies, such as universal health care and job protection.:

Pros:It is a single payer system,in which the government finances health care but the delivery of health care services is under private control.

Cons:Americans have a traditional reliance on individual responsibility and a commitment to the ideal of a limited national government,in accord with the principels of market justice.

Despite various protections implemented to insure the safety of deposits, such as the FDIC, Americans withdrew $150 billion from money market funds over a two-day period in September 2008, compared to average weekly outflows of roughly $5 billion.29 The huge amount of money poured into credit markets and banks was designed to restore confidence in financial institutions and to expand credit.

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