The United States government has a definition of economic stimulus in the Making Stimulus Work Act. In layman's terms, “stimulus” is money or fiscal aid given to businesses, households, and governments in an effort to promote economic growth. When discussing stimulus, it is meant to be an easy way for the layman to understand what is being done.
In laymen's terms, stimulus means any monetary or fiscal stimulus that helps a business or household recover after an economic downfall. Stimulus may also refer to economic policies such as reducing interest rates, quantitative easing, and temporarily lowering tax rates on some individuals or businesses. This type of spending or giving money to businesses is called stimulus spending. By providing businesses with extra funds, it is hoped that they will hire more employees and increase production to recoup their lost profits and provide a boost to the economy overall.
In order for an economic stimulus program to work, Congress passes a definition of economic stimulus. The definition includes which types of grants are available, how much money each grant is worth, and how much is needed to be spent on the projects. Some examples of this type of assistance may be provided by the Small Business Administration or the federal highway department. The Small Business Administration, or SBA, gives small grants to a number of different businesses and allows small businesses to apply for and receive this money. These grants are typically not loans, but rather handouts to assist small businesses in their operations.
Quantitative Easing also falls into the definition of economic stimulus. This occurs when a central bank prints money in an attempt to increase the value of the national currency. Interest rates are usually decreased when this happens. This is beneficial to businesses who have their savings accounts tied up with the central bank, as well as to individuals who are interested in investing money in the stock market.
A key part of Stimulus Bill is the Credit Card Purchase Assistance Act. It requires that all consumers who receive a credit card from a participating financial institution are allowed to receive a tax break. The tax break is given to businesses, and not to individuals, making the act one of the most significant examples of economic assistance. The tax break also increases the amount of money that banks give out, creating more spending power for both businesses and individuals. Another example of this is the Small Business Association's Work For the Cash Program, which provides incentives to financial institutes for cash advances.
It's difficult to pinpoint any one thing that makes the definition of an economic stimulus program unique. In terms of the government's ability to provide money for different purposes, it probably just depends on who you ask. For businesses, the stimulus money may be free money handed to them without any strings attached. For . . . . . . individuals, it is nearly impossible to give a clear answer as there are so many different programs out there. Some stimulus handouts may have nothing to do with the economy at all, while others act in ways to help the economy to improve in specific ways. It really depends on who you ask.