when an economy is in a recession automatic stabilizers may by design result in higher budget deficits this aspect of fiscal policy is a tool of keynesian economics that uses government spending and taxes to support aggregate demand in the economy during economic downturns 
by taking less money out of private businesses and households in taxes and giving them more in the form of payments and tax refunds fiscal policy is supposed to encourage them to increase or at least not decrease their consumption and investment spending in this case the goal of fiscal policy is to help prevent an economic setback from deepening real world examples of automatic stabilizersautomatic stabilizers can also be used in conjunction with other forms of fiscal policy that may require specific legislative authorization examples of this include one time tax cuts or refunds government investment spending or direct government subsidy payments to businesses or households some examples of these in the united states were the 2008 one time tax rebates under the economic stimulus act and the 831 billion in federal direct subsidies tax breaks and infrastructure spending under the 2009 american reinvestment and recovery act 1 2 3 in 2020 the coronavirus aid relief and economic security cares act became the largest stimulus package in u s history it provided over 2 trillion in government relief in the form of expanded unemployment benefits direct payments to families and adults loans and grants to small businesses loans to corporate america and billions of dollars to state and local governments 4 special considerationssince they almost immediately respond to changes in income and unemployment automatic stabilizers are intended to be the first line of defense to turn mild negative economic trends around however governments often turn to other types of larger fiscal policy programs to address more severe or lasting recessions or to target specific regions industries or politically favored groups in society for extra economic relief 