Every time a recession looms or the economy starts to slow down, the government seeks to restore the economy through different stimulus plans. The 2008 recession was one of those cases. When the mortgage crisis hit the economy, causing widespread panic with the sudden financial crash, the government took immediate steps to stimulate the economy and restore confidence in the economic market. President Bush signed the Economic Stimulus Act of 2008 which gave low and middle income taxpayers a $300.00 stimulus rebate check for qualifying children and $600.00 for adults. Any qualified taxpayer who did not receive the stimulus check was allowed to offset the stimulus amount against any outstanding tax liability.

The intention of the stimulus check was to induce spending in the economy in the hope of reviving it. Since lower- and middle-income earners were expected to spend the funds they received on goods and services, economists projected they were the best bet for reviving a stagnant economy. Increased spending would mean increased demand, bringing growth to manufacturing and creating jobs by extension. However, the expected impact of the stimulus checks did not result in significant economic growth, instead producing a government deficit of $165.9 billion.

There were mixed reactions and proposals on how to solve the new crisis that had been created (the resulting deficit problem). The economy was slowing down again and the government had to take action again and fast. Federal Reserve Chairman Ben Bernanke advised that a second stimulus plan might be appropriate to keep the economy going. However, lawmakers were divided on the stimulus plan, with others suggesting tax cuts instead.

Eventually, there was no second stimulus check in 2008, as many anticipated. When the Obama Administration took over the White House, they established several stimulus programs under the American Recovery and Reinvestment Act (ARRA) of 2009. Under the stimulus package, the recipients of the stimulus checks were retired and disabled citizens. , who received $250.00. In addition to refund checks to this qualified group of people, the ARRA opted for tax exemptions for the rest of the taxpayers. The Making Work Pay tax credit was extended to low- and middle-income individuals. Individuals who qualified received a credit of $400.00 and married couples who filed a joint return received a credit of $800.00. The credit that was scheduled to last through 2009 and 2010 expired and was replaced by the 2010 Payroll Tax Credit.

Under the Payroll Tax Credit, the Social Security tax was reduced from 6.2% to 4.2% with a cap of $106,800.00. In addition to the introduction of the payroll tax credit, Congress decided to extend the Bush tax cuts set to expire in 2010 for two more years (until 2012).

However, in May 2011, a report on employment and unemployment showed that economic progress was not approaching as expected. Recent reports also indicate that the manufacturing sector is in decline and the May 2011 Federal Reserve Report also provides disappointing figures. Expectations are high that the government will come up with additional stimulus packages, including another stimulus check distribution plan, to try to further revive the economy. However, the anticipation of a stimulus package is now challenged by the public deficit. For now, economists, tax experts and the general public can only wait and see what remedy the government will implement to try to resolve the situation.