Wednesday, February 17, 2010

$32 Billion per Month

According to this report from CNN, this is how much your government will spend in economic stimulus funding in the coming months. That's a lot of money. Are we spending it right?

There have been some interesting reports on NPR and in other news sources which suggest that stimulus spending up to now has not had the intended effect. For instance, stimulus money directed to "shovel-ready" projects has benefited recipients over the short term (that is, workers were hired to complete the project), but not over the long term (that is, the construction workers employed for the project were laid off again).

Considering the (one-sided) discussion we had in this space yesterday about the limits of generosity, we have to ask how decisions on investing the stimulus funds you and I (and our children, and grandchildren, and great-grandchildren) are generously providing are being made. Are we doing this smartly? What is the intersection of the graph lines showing money spent and long-term economic recovery benefit received?

I don't think anyone really knows.

It looks to me as if that $32 billion per month is going to go to the banks and industries which have the loudest voices in the discussion (and it'll get worse ... remember Citizens United v Federal Election Commission?).

What's your idea? How would you spend $32 billion per month to get the country back on its feet again.

And no, "buy Chinese" is not an acceptable answer.

Have a good day. More thoughts tomorrow.

Bilbo

8 comments:

Debbie said...

What good is dumping money into banks and industries if the American public has no money to spend? TAX CUTS, return the money to the people! Cut government spending (Congress and the Prez have identified areas worth billions to fund their new spending), refuse to bail out companies with unions such as the UAW which will either cause them to go under or cut their costs thus the cost of their goods, deport illegal aliens to create jobs for those of us who are legally here, and let FREE ENTERPRISE do the rest. (I'm not too opinionated, am I?)

Debbie said...

Now that I have had a cup of coffee...FIRST I would put me on the government payroll and SECOND, Bilbo, your pay would be doubled! :)

Mike said...

Debbie Debbie Debbie ... We've just had 8 years of free enterprise. I don't think this country can handle anymore.

Debbie said...

Mike...my investments indicate it will take more than a decade to recuperate from one year of Obama and friends!
We need another Ronald Reagan!!!!

SusieQ said...

According to our financial advisor the money is sitting in the banks ready to be loaned out. But the banks are afraid to part with it for that purpose, because they do not know what is coming down the Obama pipeline in the form of taxes and regulations that may harm them and the economy. In the meantime they are making a buck by investing that money in short term items.

The money sitting in the banks is still wet from the printing presses, we were told, and once it begins to flow into the economy in the form of loans we will experience inflation for that reason.

Businesses are afraid to hire, we've been told, because they do not know what Obama is going to do that may hurt the economy further. If they had confidence in him and the economy, we would begin to see jobs appear.

I think Debbie may be right...we need another Reagan.

KKTSews said...

I am not pleased with the pace of recovery, but I must point out that most of damage to our portfolio (and, by extension, I assume most people's) happened under the tail end of Bush's presidency.

I think banks are not lending becuase of greed, not precisely because they fear regulation. They are not willing to lend with any risk, lest they lose the income. It is safer for them to hold on to capitol and see how desperate good people will become to get money (and thus, what premium they will pay).

Frankly, I think the president, whoever he is, has little actual control over the economy. It's not a simple machine to turn on and off.

Mike said...

Debbie - He's the one that turned the Republicans from conservatives into spend spend spendaholics. Where's my chart when I need it!!

Debbie said...

I am so glad I put all of my stock money into a money market just before Obama won! Under Bush 2 of my stocks went up over 300% and they are in the cellar now! With my heart condition I don't dare open the statements re: my 401K.