The Economic Stimulus Package

The American Recovery and Reinvestment Act

Barack Obama had been elected on a platform of healthcare reform and a wave of frustration over the sinking economy. As he entered office in 2009, he set out to deal with both. Taking charge of the Troubled Asset Relief Program (TARP) instituted under George W. Bush to stabilize the country’s financial institutions, Obama oversaw the distribution of $7.77 trillion designed to help shore up the nation’s banking system. On February 17, 2009, Obama signed the American Recovery and Reinvestment Act (ARRA) of 2009, a $787 billion economic stimulus package aimed at helping the economy recover from the deepening worldwide recession. The act includes increased federal spending for health care, infrastructure, and education. In addition, it includes various tax breaks, incentives, and direct assistance to individuals. Through the act, the Obama administration pumped almost $800 billion into the economy to stimulate economic growth and job creation.

Bailing Out the Auto Industry

Recognizing that the economic downturn also threatened major auto manufacturers in the United States, Obama sought and received congressional authorization for $80 billion to help Chrysler and General Motors. Over the following months, the White House set terms for both firms' bankruptcies, including the sale of Chrysler to Italian automaker Fiat and a reorganization of General Motors, giving the U.S. government a temporary 60% equity stake in the company and the Canadian government a 12% stake. The action was controversial, and some characterized it as a government takeover of industry. The money did, however, help the automakers earn a profit by 2011, reversing the trend of consistent losses that had hurt the industry since 2004. It also helped prevent layoffs and wage cuts. By 2013, the automakers had repaid over $50 billion of bailout funds. 

The National Debt

On August 2, 2011, after a lengthy congressional debate over whether to raise the nation's debt limit, Obama signed the bipartisan Budget Control Act of 2011. The legislation enforces limits on discretionary spending until 2021, establishes a procedure to increase the debt limit, creates a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reduction with a stated goal of achieving at least $1.5 trillion in budgetary savings over 10 years, and establishes automatic procedures for reducing spending by as much as $1.2 trillion if legislation originating with the new joint select committee does not achieve such savings. By passing the legislation, Congress was able to prevent a U.S. government default on its obligations.

Effects on America's Economy 

As it did throughout 2008, the unemployment rate rose in 2009, reaching a peak in October at 10.0%. Following a decrease to 9.7% in the first quarter of 2010, the unemployment rate continued to fall moderately; by November 2012 it had reached 7.7%, and in the last month of 2013 it had decreased to 6.7%. During 2014, the unemployment rate continued to decline, falling to 6.3% in the first quarter. 

Gross domestic product (GDP) growth returned in the third quarter of 2009, expanding at a rate of 1.6%, followed by a 5.0% increase in the fourth quarter. Growth continued in 2010, posting an increase of 3.7% in the first quarter, with lesser gains throughout the rest of the year. In July 2010, the Federal Reserve noted that economic activity continued to increase, but its pace had slowed; overall, the economy expanded at a rate of 2.9% in 2010. The Congressional Budget Office and a broad range of economists credit Obama's stimulus plan for the economic growth during these years.

The Occupy Movement

Occupy Wall Street (OWS) is the name given to a protest movement that began on September 17, 2011 in Zuccotti Park, located in New York City's Wall Street financial district. The protest received global attention, spawning the Occupy movement against social and economic inequality worldwide. It was inspired by anti-austerity protests in Spain relating to the 15-M movement, as well as the recent uprisings and revolution in Egypt.

The main issues raised by OWS were social and economic inequality, greed, corruption, and the perceived undue influence of corporations on government—particularly from the financial services sector. The OWS slogan "We are the 99%" refers to income inequality and wealth distribution in the U.S. between the wealthiest 1% and the rest of the population, a gap that had widened under previous administrations. To achieve their goals, protesters acted on consensus-based decisions made in general assemblies which emphasized direct action over petitioning authorities for redress.

Occupy Wall Street

Protestors occupying Zuccotti Park in New York City.

OWS's goals include a reduction in the influence of corporations on politics, more balanced distribution of income, more and better jobs, bank reform (especially to curtail speculative trading by banks), forgiveness of student loan debt or other relief for indebted students, and alleviation of the foreclosure situation. Early on the protesters were mostly young; as the protests grew, however, older activists also became involved. The average age of the protesters was 33, with people in their 20s balanced by people in their 40s. A study based on survey responses at OccupyWallSt.org reported that the protesters were 81.2% White, 6.8% Hispanic, 2.8% Asian, 1.6% Black, and 7.6% identifying as "other."

The protesters were forced out of Zuccotti Park on November 15, 2011. Protesters turned their focus to occupying banks, corporate headquarters, board meetings, foreclosed homes, and college and university campuses. On December 29, 2012, Naomi Wolf of The Guardian newspaper provided U.S. government documents which revealed that the FBI and Department of Homeland Security (DHS) had monitored Occupy Wall Street through its Joint Terrorism Task Force, despite labeling it a peaceful movement. The New York Times reported in May 2014 that declassified documents showed extensive surveillance and infiltration of OWS-related groups across the country.