3rd Federal Bank

It's a kind of point of pride for me that I'm pretty good at taking complex subjects and break them all to understand. So when I started to watch the recovery plan, I imagined having a conversation with a 10 yo on this. How could I explain it and what questions would they ask? So here's the imaginary conversation with Timmy, a smart 10 years old workbook 3rd with blue freckles. I know. I'm weird.

What is the recovery plan?

It is a way for the government to inject money to help turn around an economy of shit. It does this by creating jobs, saving jobs, and ultimately get people to spend money on things like new cars, houses, investments and Xbox.

Why do we need?

1. Currently many people are unemployed or not enough work to pay their bills.


2. Because of this, they (consumers) can not spend money buying things, investment, savings, or pay taxes.


3. Because consumers can not buy things, companies do not sell as much as they need to make a profit.


4. Because companies do not benefit them, they draw more people. See point 1.


5. In addition, because people do not buy companies with combined investment is not that much profit, it means that the stock market is down because the stocks of companies that are not worth much in the habit of be.


6. When the stock market, people are losing money they had in there, can not buy things, and stay away from putting more money into the stock market over a long period. On the commercial side, companies today have not the money that is usually the sale of shares to invest in creating new stuff. Back to step 1 again.

How the stimulus package intended to solve this problem?

New jobs -

What does this mean? More people working, more people pay taxes, more people buy things, which means businesses to hire more people to do more things, and so on. Upward spiral.

How long will it work? 1-5 years. Like most great bulk of expenditure is for infrastructure or large construction projects, it will take time for the runoff. You do not start a massive development project in a few weeks or months. The advantage is that these projects have a much greater return on investment long term. Many jobs for a long time to come. just takes a little time to start.

Retaining existing jobs -

What does this mean? State and local governments are bumming. Because fewer people have jobs and spend less, states receive less taxes. Less taxes means they must cut programs and staff. Fewer staff, more unemployment. downward spiral.

How long will it work? Immediate. These are existing jobs to existing things. They can hire back tomorrow if the government gives to states and local city funds. In addition, workers will then pay taxes on their income and buying more things. This helps everyone.

Provide tax relief

What does this mean? If you have more money in your pocket because you pay less tax, you'll spend more.

How long will it work? Immediate 1 year. It depends on what kind of tax cuts, they are. If tax cuts are an employer, you will see a difference in your paycheck immediately. If they are credits or discounts on your taxes late, you will not see any difference until you go pay your taxes i.