Tuesday, January 27, 2009

Stimulus Timeline

CBO reports the time path of estimated outlays on government purchases under the proposed stimulus bill.

Assuming enactment in mid-February, CBO estimates that the bill would increase outlays by $93 billion during the remaining several months of fiscal year 2009, by $225 billion in fiscal year 2010 (which begins on October 1), by $159 billion in 2011, and by a total of $604 billion over the 2009-2019 period.

Is this too long a time frame to cause any benefit?

Yes, according to the tone of Greg Mankiw (maybe I'm reading too much into the "So"):
So only 8 percent of this spending occurs in budget year 2009, and only 41 percent occurs in first two years.
No, according to Paul Krugman:
By my count, 70 percent of the Division A stuff and 91 percent of the Division B spending comes within the fiscal 2009-2011 window. If you go up to the end of calendar 2011, we’re probably up to about 77 and 96 percent. That’s not at all bad.


  1. while politics do tend to get shady, this has fox news / conservative republican 'we'll make a fight out of nothing to get more tax cuts in the plan written all over it'.(i actually wrote that fox news comment before i clicked over and saw it was in fact... from fox news... too easy).

    $4.1 billion for "neighborhood stabilization activities related to emergency assistance for the redevelopment of abandoned and foreclosed homes" means a whole lot besides acorn.

    here is another perspective:

    "The provision requires that money will be distributed through competitive processes. It states that, "not less than $3,440,000,000 shall be allocated by a competition" to "States, units of general local government, and nonprofit entities or consortia of nonprofit entities." It also provides that "up to $750,000,000 shall be awarded by competition to nonprofit entities or consortia of nonprofit entities to provide community stabilization assistance."

  2. Oh, give me a break. Right now, economists are forecasting a bottom around mid-year. How does spending stimulus in 09 and 10 help that? Or is the assumption on Krugman's part that this recession runs another 3 years?

  3. Even if the economy were to bottom in mid-2009 (I personally doubt it), a bottom doesn't mean there isn't an output gap that needs to be filled.

    For example, if the economy "should" be producing 1000 units at full capacity and is now producing 900, should we not stimulate the economy to move that figure up to 950, rather than the improved 910?

    Probably a lame example, but I hope you get my point.