A successful stimulus bill would look a lot like the one that was passed
Unfortunately, the one thing Leonhardt gets wrong is the idea that aid to states won’t just sit in accounts – unfortunately, that’s exactly what’s happening in Indiana, thanks to Bush’s man Mitch. (See “Most stimulus cash for state sits unspent”)
Clipped from www.nytimes.com
Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.
Moreover, the introduction of the most visible parts of the program — spending on roads, buildings and the like — has been a bit sluggish. Aid to states, unemployment benefits and some tax provisions have been more successful and account for far more of the bill. But their successes are not obvious.
The last year has shown — just as economists have long said — that aid to states and cities may be the single most effective form of stimulus.
And unlike tax cuts, state and local aid never languishes in a household’s savings account.