What is the importance of government stimulus programs during a recession? Give examples.
Answer (1)
During a recession, people lose jobs, businesses earn less, and the economy slows down. One way to fight this is for the government to use stimulus programs. These programs aim to add more money into the economy to encourage spending, create jobs, and help businesses recover.In the 2008 crisis, the United States created many stimulus programs. One big example was the Recovery Act of 2009, which planned to spend around $790 billion. The money went to building roads, schools, hospitals, and also to giving tax cuts and unemployment benefits. Another example was the Cash for Clunkers program, where people got rebates for trading in old cars for new, fuel-efficient ones. This helped the car industry and created jobs.In the Philippines, we also saw government stimulus during the COVID-19 pandemic. Programs like “Bayanihan to Heal as One Act” gave financial aid to poor families and supported health workers and small businesses. These actions helped millions survive during lockdowns.Stimulus programs are important because when people have money, they spend it on food, transportation, and other needs. This helps businesses stay open and keep workers. It's like restarting a car engine that has stopped running—government money helps jumpstart the economy again.However, stimulus programs must be used wisely. If the government spends too much or borrows too much, it can cause inflation or debt problems later. So there must be a balance.
