Policy Paper

Policy Paper

American Recovery and Reinvestment Act of 2009

BUS 102: Ethics and Law in Business and Society

December 12, 2015

Professor Dr. Sean Jasso

Section 21, TA: Felix Cunanan

Table of Contents

Introduction3

History of the act4

Current Situation5

Rationale for the Public Policy5

Main Purpose of the Act6

Implementation7

Department of Education7

Department of Energy8

Department of Agriculture8

Department of the Treasury9

Department of Commerce9

Department of Defense10

U.S. Code10

Title 6 § 453b. Requirement to buy certain items related to national security interests from American sources; exceptions 10

Title 15 § 631: Declaration of policy 12

Title 26 § 45: Electricity produced from certain renewable resources, etc.12

Impact on Businesses and Society12

Response to Government Failure13

Preventing Future Market Failure 13

Negative Externality14

Public Goods14

Information Asymmetry15

Policy’s Efficacy15

Arguments Against the Policy.16

Recommendations16

Appendix18

References23

Introduction

The American Recovery and Reinvestment Act (ARRA) is a $787 billion bill that was signed into law during the Democratic administration of President Barack Obama. The law was created in response to the great recession that began in 2007. Signed on February 17th, 2009, the ARRA was passed with the intention of providing a temporary bump to the nation’s economy. The government hoped to stabilize and stimulate the American economy by creating jobs and keeping existing ones, investing in long-term economic growth and fostering unprecedented levels of accountability and transparency in government spending (Overview of the American Recovery and Reinvestment Act). Investing billions of dollars to help the United States (U.S.) recover from deep recession was an unprecedented effort; it includes provisions on how to “modernize the nation’s infrastructure, enhance energy independence and expand educational opportunities, preserve and improve affordable health care, provide tax...