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We Haven’t Swallowed the Medicine


Last week, Russ Roberts pointed to the government website which tracks how much stimulus has been doled out to date:

To see the total amount spent, go here and click on box number 3 in the main window at the top of the page. It's tricky. Right now the main window is about "Health Care in Indian Country" but at the bottom of the blue box, there is a "Learn More" option. Click on number 3.

At first, I assumed the weekly totals must not be cumulative. How could a cumulative number go down? Did they take some of the money back? Turns out there was a $8.9 billion "accounting adjustment." So the correct number that the government is reporting as of May 22 is $35.9 billion. That is the total spent out of the $787 billion. That's just under 5%.

This week, a follow-up:

But the reason I mention that only $36 billion of the stimulus has been spent in the first 3+ months since the stimulus bill passed is to remind people that we were told that we needed to spend $787 billion urgently without discussion or thought to save the economy and that the reason it would work was because It—and "it" is the spending of this enormous sum of money—would create jobs. It  would create jobs by stimulating aggregate demand in the face of a slump in consumer spending. If indeed the economy does recover—the so-called V shaped recovery, then it cannot be via this increase in aggregate demand caused by government spending.

These are wacky times, when 36 billion dollars seems a pittance.

But there’s hope. Since we haven’t swallowed most of its Keynsian remedy, we could repeal the Porkulous bill before all its hidden costs and unforeseen consequences become catastrophic. $660 billion has yet to be committed.