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Unopened Stimulus Packages

Aug 19, 2010 • Economic History, Economic Thinkers, Government • 151 Views    No Comments

Economists recently have been debating whether the $787 billion 2009 stimulus package has helped the economy. Perhaps first they should ask what has been spent.

For a variety of reasons, recipients of stimulus money are not spending it. Dollars destined for energy efficiency in Detroit have barely been used.  Worried that next year they might not be able to afford teachers hired with stimulus money, school districts in NJ, Texas, NYC, and CA have said that they are not spending it. Other places have just not figured out what to do with their money.

Responding to criticism about slow spending, the Obama Admnistration points out that the stimulus package had 3 sections. They say that: 1) $360 billion in tax breaks and other help for businesses and individuals has been paid out. 2) The $296 billion that targeted unemployment assistance, food stamps, and other aid programs has mostly been spent. 3) $170 billion meant for infrastructure projects has not been spent while $66 billion has.

You might want to look at the Obama administration’s stimulus website to identify local projects. Have you seen any spending near your home?

The Economic Lesson

Fiscal policy includes government spending, taxing, and borrowing. During the 1930s Great Depression, President Roosevelt and the Congress used fiscal policy to try to stimulate economic growth and to create jobs through the TVA and other government funded projects.

 

 

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