In the political cartoon “Five Year Anniversary,” by Nate Beeler, five stacks of one hundred dollar bills are set on fire on top of a cake that reads “2009 Stimulus.” The five candles represent the Stimulus Package’s, also known as the American Recovery and Reinvestment Act, five years of age upon being signed into legislation by Barack Obama in 2009. Beeler’s cartoon depicts the idea that the ARRA wasted money rather than pushing the economy out of the Great Recession.
In December 2007, the United States experienced a time of rising unemployment and declining GDP (gross domestic product) that lasted until 2009. This period was dubbed the Great Recession due to the severity of the negative impacts. The U.S. National Bureau of Economic Research defines a recession as a “period of at least two consecutive quarters of declining levels of economic activity” (Krabbenhoft), and during the time span between 2007 and 2009 GDP decreased by 3.5 percent and the unemployment rate increased more than 5 percent. The gross domestic product indicates the total value of goods and services produced over a period of time, so production and consumer spending decreased drastically. The government attempted to alleviate the unemployment rate and increase economic growth by creating what’s known as a multiplier effect. The multiplier effect occurs when there is an increase in final income from the increase in spending from the initial stimulus. Consumer expenditures make up 70 percent of GDP, and increasing consumer expenditures would create this effect, for consumption leads to the selling of goods and so on. Business investments are also a main component of GDP, and providing business incentives to increase the level of investment was also critical to alleviating the economy. With these two conditions kept in mind, President Bush signed the Economic Stimulus Act of 2008 into legislation. The ESA consisted of 3 provisions: the first provision provided a tax rebate for taxpayers while the second and third provided tax incentives to businesses to stimulate business investment. Unfortunately, consumer spending did not increase as the government hoped it would. Many households preferred to keep their money in their savings rather than spend it or pay their debts; thus, the multiplier effect did not take off. The tax incentives for businesses were also ineffective because the success was minimal and did not improve the economy; therefore, the ESA was failed, but it inspired a new act that was created by the next president, Barack Obama.
After becoming president, Barack Obama signed the American Recovery and Reinvestment Act of 2009 into legislation. The ARRA allowed people to keep a larger segment of their paychecks, provided tax credits for homebuyers, college expenses, and home improvements. Essentially, people got more than a single rebate and had more of an incentive to increase consumer spending. The ARRA also provided money for the government to improve health care, education, and infrastructure in order to create more jobs for the public and decrease the unemployment rate. Despite these efforts, the economy continued declining; however, GDP increased slightly during the third quarter of 2009 and fourth quarter of 2013, but unemployment continued to increase. Although the ARRA played on the idea of the multiplier effect, it did not work because people either lost hope during the recession and stopped looking for jobs or used their money in ways the government didn’t intend. The ARRA had good intentions, but nothing occurred the way the government believed or wanted it to happen. This relates to John Knott’s cartoon, “What’s the Next Play Going to Be?” because of the naive thought that people would comply with what higher officials wanted them to do; in the end, people spent money the way they wanted to spend it or stopped trying to find a job whenever hope was lost. It is difficult to bring an economy out of a recession or decrease the unemployment rate immediately, and it takes time for such drastic changes to occur because people do not have unanimous opinions. Ultimately, the ARRA failed just as the NRA had due to the difficulty in governing people’s actions. The failure of the ARRA and the NRA also expressed the theme that assuming what an entire nation of people would do is naive because people do not act or think similarly, and it is not safe to predict how millions of people would behave, especially during a crisis.
The irony behind the cartoon lies behind the fact that the anniversary of the Stimulus Package was being celebrated despite how negatively people viewed it. It is celebrated because the White House believed the ARRA was good for the economy, but many others thought otherwise as indicated by the burning money. Beeler’s cartoon depicts both standpoints, but the main focus is on how disfavored the ARRA was as shown by making the burning bills the focal point of the cartoon.
Nate Beeler’s political cartoon “Five Year Anniversary,” stresses how much of a fail the ARRA was due to the amount of money it dissipated. Many efforts were put in to save the economy, but the government did not consider the fact that some households or businesses wouldn’t comply with their intentions. The government was unable to dictate the people’s actions, ultimately leading to the collapse of the American Recovery and Reinvestment Act.
Krabbenhoft, Alan G. “Economic Stimulus Act of 2008 and the American Recovery and Reinvestment Act of 2009.” Encyclopedia of Business and Finance, 3rd ed., vol. 1, Macmillan Reference USA, 2014, pp. 234-236. Gale Virtual Reference Library. Accessed 28 Nov. 2016.