Why a New Stimulus Package Is Premature

The reason is simple. We have not implemented most of the last stimulus package, yet. Very few project funds have been awarded and paid out for work in progress, excluding the $83.8 billion in tax benefits. See here.

Of the total of $787 billion authorized as the stimulus package, more formally known as the American Recovery and Reinvestment Act of 2009, only $194.5 billion has actually been paid out by all means whatsoever, that is only about 25% of the funds authorized. If we exclude tax benefits from this figure, only $110 billion of the stimulus package or about 14% has actually been paid out for projects as of the end October 30, 2009.

But this tells us nothing about how the projects are coming along. On that score, a pie chart shows us the number of stimulus projects in the program which have been completed, started but less than 50% completed, started but more than 50% completed and not started, as measured by on-going work in progress payments.

The data are shocking and set out below:

• 4,110 Completed
• 25,932 Less than 50% complete
• 5,063 More than 50% complete
• 21,881 Not Started

Of the total projects slated for the stimulus program, the vast majority are either not started or less than 50% complete. Less than 8% are completed. Almost 40% are not started. And over 45% are less than 50% complete.

Surely, we don’t need a new stimulus program until we have implemented and tried this one.

Disclosures: none

Comments

[Carlos Lam:]

Two reasons why we don't need a new stimulus:

1. They don't work. We tried them during our Great Depression, and they were found lacking. Indeed, even FDR's own Treasury Sec'y mused, "We have tried spending money. We are spending more than we have ever spent before and it does not work ... After eight years of this Administration we have just as much unemployment as when we started." The Japanese tried them during their (continuing) lost decade, and the Nikkei is still way below where it was at its height, Japan has taken on debt that now stands at 180% of GDP, and Japanese citizens' savings rates have plummeted from 15% (1990) to under 4% (2004).

2. We can't afford it. China has the reserves to finance a "stimulus" program, as foolish as the idea of stimulus may be. We don't have the money:
* Nat'l debt...$12 TRILLION
* SS unfunded liability...$14 TRILLION
* Rx unfunded liability...$18 TRILLION
* Medicare unfunded liability...$74 TRILLION
*** TOTAL...$118,000,000,0...

Nov 12 06:14 AM

[Dave Wrixon:]

Well, this underlines why you need to do what needs to be done now, because the useful and important things take forever to organize. However, beyond fixing and improving it decrepit infrastructure there is no justification for the US doing anything as tax cuts and other measures only dig you into a deeper hole. We used to laugh about the communists fiver year plans but the Chinese didn't have any problem coming up with shovel ready projects!

Nov 12 06:39 AM

[User 353732:]

It is not all premature if you want:
.....more concentration of wealth and power
.......more WashDc, Wall St, MSM deceit and corruption
.......millions more jobs destroyed in the productive economy
........tens of thousands of more small business failures
........further debasement of an already degraded dollar
........accelerated downward mobility for the Middle class

Nov 12 09:25 AM

[John Galt:]

It disgusts me to even call it "stimulus".

We are going to take 787,000,000,000 from some people and pass it out to other people. Who needs "free money"?

Oh you do congressman from Illinois?
- $1 million to study the health effects of environmentally friendly public housing on 300 people in Chicago.

How about you congress man from Washington?
- $11 million for Microsoft to build a bridge connecting its two headquarter campuses in Redmond, Wash., which are separated by a highway.

You from Arizona?
- $30 million for a spring training baseball complex for the Arizona Diamondbacks and Colorado Rockies.

Over there in PA?
- $800,000 for the John Murtha Airport in Johnstown, Pa., serving about 20 passengers per day, to build a backup runway.

and don't forget efforts to promote our spending...
- $300 apiece for thousands of signs at road construction sites across the country announcing that the projects are funded by stimulus money.

The list is too long to even list. All sorts of projects are being undertaken with money that wouldn't have been spent on them unless they were "free". The worst of all is paying off states like California so that they don't make the belt tightening cuts that need to be made. The spending plan is a big sick joke.

Nov 12 02:32 PM

[Kimball Corson:]

The original stimulus bill was supposed to be for tax cuts and for infrastructure rebuild and repair. That is what we were told. It seems now like it is too much for Democratic pork and much too little is being spent and targeted for infrastucture. Too, bad. Washington doesn't get much right. It sold us a bill of goods here, I think.

Nov 12 04:48 PM

[John Galt:]

Unless you are microsoft and don't have any money. I think we need to build a bridge to connect the richest man in the world's business.

Or unless you are a major league baseball team. I have an idea, let's take public money, build them a great big ball park, then you could pay for high priced tickets to sit in that ball park that you helped build as well! Then, when the economy is in the gutter, we will take you and your grandkids money and build them a spring training facility for the millionare players and billionare owners.

Americans believed the hype for "rebuilding our infrastructure", what they got in return was airports in the middle of nowhere, bike paths cleaned, and a tunnel bridge for sea turtles.

It was a joke. Chicago style politics. Give kick backs to your friends and punish your enemies.

Nov 13 08:39 AM