Wednesday, January 28, 2009

What stimulus spends money *after* the recession?

Greg Mankiw has a very strong argument that the proposed stimulus bill is anything but:

So only 8 percent of this spending occurs in budget year 2009, and only 41 percent occurs in first two years. Note that spending on transfer payments and tax relief occurs much faster than this: click through to the above link for details.

It is to be expected that any large bill will attract a large amount of pork, as politicians compete with each other. What is unusual is that this bill has more stuff snuck than it does actual substance. Any stimulus needs to happen during the actual recession, not years afterwards.

To get a better picture of what the non-stimulus part consists of, Arnold Kling gives a few examples.