Obama economic advisor Christina Romer and her husband have previously explained one of the key objections to economic stimulus plans: the timing never comes out quite right. Spending kicks in after it is really needed. Yes, some of the money from the Obama stimulus has come through and there is some road building. However, the Washington Post tells us:
In most cases, though, the money is working its way into the system far more gradually as officials strive to meet not only existing guidelines for programs receiving aid but also reporting requirements that have been added to make sure that stimulus funding is spent as intended and to account for the jobs it creates.
As a result, White House officials say the bulk of the money will start hitting the streets later this year and early next, with the goal of spending 70 percent of it by the summer of 2010. As of Tuesday, $54 billion from the package had been “obligated,” meaning that states, cities or other recipients could begin drawing from it, and $11.7 billion of that had been disbursed.
But by the summer of 2010 the recession should be ending, right? That’s what Larry Summers was saying when he assured us that the economic “free fall” was over and better times were in sight. So what was the purpose of the stimulus then? Certainly it has not, as advertised, kept unemployment below 8%. And that needed infrastructure turned out to be much less of the total pie than many had imagined. It seems all that was “achieved” was a dramatic rise in spending, the establishment of a new “baseline” in budgeting, and another trillion dollars of debt.