The CBO analysis of the stimulus is available online. If you really want to know what the impact of the stimulus may be, read it for yourself. Don’t believe whatever talking heads say. Especially don’t believe what they said last week, before the analysis had been released. Lying bastards. It’s true that the CBO says much of the money won’t be spent in federal fiscal year 2009. If you think about it for a few seconds, you’d realize this is blatantly obvious. FY 2009 started in October, so it’ll be about one-third over before the bill becomes law. Then, it still takes time for things to get moving. The “quick” moves won’t be able to add money to the economy until April, half-way into the fiscal year. A multi-year stimulus which has a lower impact in a 6-month “year” than in the following 12-month year? SHOCKING! A quote from the NY Times seems to be aghast that it may take a few months to a year to get some construction projects moving. Yeah, well…have you seen how long it takes to complete or even plan major construction projects? Boston could tell you.
One thing the CBO won’t tell you, quite explicitly denoted on the front page of their report, is what return on investment we can expect for each provision, or the bill as a whole. No matter what Marie Cocco says, the CBO doesn’t make those predictions. But, most economists agree that tax cuts (while nice and I’ll take any money the government sees fit to give back to me) are not as effective as you might think. Turns out, most of us actually save some of that money when we get it, rather than immediately spend every dime. One typical comment:
“People are going to spend 30, 40 cents on the dollar, so the multiplier is going to be low,” said Adam S. Posen, deputy director of the Peterson Institute of International Economics.