The continued economic malaise that is gripping the nation is ushering in another round of eocnomic pessimism, prompting calls for a second stimulus. The concern is that what little momentum we have in the economy will begin to churn to a halt as the stimulus “winds down.”
However, much of the stimulus money hasn’t been spent yet, and almost half of the money dedicated to government spending programs is still waiting to be distributed. According to the official government website tracking the stimulus (www.recovery.org), as of August 20, 2010:
- 77% ($223 billion) of tax benefits have been distributed;
- 51% ($139 billion) of government grants, loans, and contracts have been doled out;
- 64% ($143 billion) of authorized entitlement spending has distributed.
Thus, overall, more than one third of the stimulus spending has yet to be spent or distributed. In terms of direct government spending (not tax benefits), nearly half of the stimulus has yet to be spent or distributed.
This isn’t necessarily a case for spending this money. On the contrary, it’s probably a good indicator that it’s not money well spent to begin with. Moreover, given that more than a third of the total so-called stimluls money has yet to be spent, those estimates of “job creation” should be taken with a grain of salt.
More directly, given the economy’s performance, little evidence suggests that pouring more money down this rabbit hole will have any meaningful positive effect.