Where the Money Went

Where The Money Went
Paul Krugman
New York Times’ Blog
July 10, 2011, 2:54 pm
Somehow I missed the BEA’s very useful page tracking the Recovery Act and how it is translated into taxes and spending. (Thanks to the commenter who mentioned it). It’s especially useful for thinking about what the Obama stimulus really involved — and what it didn’t.
Look at the peak quarter of stimulus (pdf), which was the first quarter of 2010. I’m going to rearrange the categories a bit. Here’s how I read it: at annual rates (in other words, actual numbers in the quarter were only 1/4 as large), the total budget impact was $357 billion. Of that, we had:
Tax cuts and refundable tax credits: $151 billion
Aid to individuals (mainly unemployment insurance and food stamps): $70 billion
Aid to state and local governments: $103 billion
Everything else: $33 billion
…

So much for “we tried Keynesian policies and they didn’t work.”

Instead of turning into Greece, we’ve turned into Japan, except much worse. And policy is replaying 1937.

In the past, you could make excuses on the grounds of ignorance. In the 1930s they didn’t have basic macroeconomics. Even in Japan in the 1990s you could argue that it took a long time to realize that the liquidity trap was a real possibility in the modern world.
Krugman:

But we came into this crisis with a pretty good understanding of what was at stake and pretty good analysis of the policy options — yet policy makers and, I’m sorry to say, many economists just chose to ignore all that and go with their prejudices instead.

And the worst of it is that the people who got this so wrong have not and probably won’t admit to their awesome wrongness; on the contrary, they’ll dig in. And the Lesser Depression will go on and on and on.

He asks: “…what happened to the stimulus?”

The reality, as Krugman reminds us, is that much of it was comprised of tax cuts, not stimulus spending. And, here is where the Princeton professor reminds us that he has somewhat of a license to bitch: “…some of us warned from the beginning that tax cuts would be ineffective and that the proposed spending was woefully inadequate. And so it proved.”

Krugman also brings up the quite inconvenient facts surrounding the government’s abysmal record with regard to helping homeowners facing foreclosure. (Of $46 billion set aside to help those in foreclosure, less than $2 billion has actually been distributed.)

Hey Siriusly Wrong do you have different figures than the ones that Krugman quoted at the top of this thread?

Obama’s Stimulus Package Complete Breakdown
Written by Blain on January 28, 2009. Tagged Stocks: obama, stimulus package

I’ve been on the prowl for a complete stimulus package breakdown like this for a while, and I finally found one posted by CNN Money. They break down all the details of Obama’s initially proposed $825 billion stimulus package, citing the overall goals and financial disbursements of the package.

Obama’s stimulus package could be seen approved by mid February and focuses spending and tax cuts through four primary areas:

1.Infrastructure - Rebuilding our highways, bridges, schools, etc. alongside creating more renewable energy (39% of total)
2.State Relief - Helping the states with unemployment benefits, budget shortfalls, medicaid, and the like (13% of total)
3.Struggling Citizens – Increase food stamps, unemployment insurance coverage, and provide insurance for the jobless (12% of total)
4.Tax Cuts – Tax cuts to individuals and business (36% of total)


http://www.stocktradingtogo.com/2009...age-breakdown/

"The Act specifies that 37% of the package is to be devoted to tax incentives equaling $288 billion and $144 billion or 18% is allocated to state and local fiscal relief (more than 90% of the state aid is going to Medicaid and education). The remaining 45% or $357 billion is allocated to federal spending programs such as transportation, communication, waste water and sewer infrastructure improvements; energy efficiency upgrades in private and federal buildings; extension of federal unemployment benefits; and scientific research programs."

http://en.wikipedia.org/wiki/America...nt_Act_of_2009