Saturday, December 19, 2009

Surprise! Yesterday's newspaper says:

Slow going for stimulus funds
As construction grinds to a halt for the winter, less than 40 percent of the $47.1 million in federal stimulus money budgeted for road, bridge and sidewalk improvements [in the region] has trudged through bureaucratic obstacles to the contract stage, state Department of Transportation figures show.

And only about 10 percent of the money has made it into the economy so far as incremental reimbursements to the contractors who are doing the work....

How many jobs the local road-and-bridge work has saved or created is impossible to say.
What I said.

Back on 17 February 09, when President Obama signed the $787 billion stimulus package, people immediately started talking about "all that spending." But it ain't spent 'til it's spent. Deciding to spend money doesn't stimulate much. The decision to spend is a teaser. Getting a contract to fix the bridge, selling some heavy equipment, getting a job at the construction site -- this is how the economy gets stimulated. Payments being made.

The economy is transaction. By definition, economic stimulus must increase the number of transactions. Or else it's not a stimulus.

"...And only about 10 percent of the money has made it into the economy so far..."

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