Stimulus Bucks to Start Flying
Bulk of stimulus money will finally reach private sector in coming months.
March 10, 2010— -- What started as a trickle of money into the private sector could soon be a gusher, an analysis of the status of President Obama's $787 billion stimulus plan reveals.
A roughly $200 billion chunk of stimulus money – much of it earmarked specifically for projects ranging from highway repairs to alternative energy initiatives – is only just now beginning to wind its way from government agency coffers and into the economy, and will continue to do so over the next year. Warmer weather approaching in many parts of the country, meanwhile, brings the onset of construction season, another leading factor in what appears to be a looming deluge of federal outlay.
"The stimulus did not really impact the private sector economy during its first year," said Michael Balsam, chief strategy officer for Onvia, Inc., a Seattle-based database company which operates the Recovery.org Web site that tracks the flow of stimulus dollars. "We're now, at last, seeing the money start to hit local economies," Balsam added. "The good news is, this phase has only just begun."
However, critics of the stimulus remain steadfast that the spending measures, while perhaps well intentioned, still amount to little more than a glancing blow in the steel-cage match that is America's ongoing economic struggle.
"Sure, spending a trillion dollars won't hurt the economy," said Rep. Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform. "But even if you accept that a million jobs will result, that's still a drop in the bucket compared to the tens of millions of jobs that could have been created had we employed targeted investment tax breaks for the industries that most needed it. We could have, for example, completely retooled our auto industry. It's not too late to take that approach."
Passed last February, the American Recovery and Reinvestment Act, more commonly known as the Obama stimulus package, involved three distinct categories of spending measures: tax relief ($288 billion); entitlements, such as Medicaid and Medicare, ($224 billion); and a third, catch-all category – contracts, grants and loans ($275 billion).
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