Policy Paper: American Recovery and Reinvestment Act

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
History of the act4
Current Situation5
Rationale for the Public Policy5
Main Purpose of the Act6
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

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...