http://www.nytimes.com/2009/05/13/us/politics/13stimulus.html?_r=1 Stimulus Aid Trickles Out, but States Seek Quicker Relief By MICHAEL COOPER Nearly three months after President Obama approved a $787 billion economic stimulus package, intended to create or save jobs, the federal government has paid out less than 6 percent of the money, largely in the form of social service payments to states. Although administration officials say the program is right on schedule, they have actually spent relatively little so far. The stimulus bill has directly injected around $45.6 billion into the economy, mostly to help states cover the costs of Medicaid and unemployment benefits, one-time $250 checks that were mailed to Social Security recipients last week, and income tax cuts that began to take effect this spring. Although states around the country are beginning roadwork projects, the Department of Transportation had spent only about $11 million on highway projects through the first week of May. The intent of the stimulus program was to pump money into the economy quickly, and many members of Congress said at the time of its passage that speed was of the essence. But the huge program has been a challenge to administer for both a new administration and for states and local governments grappling with their own fiscal problems. Some states and cities are beginning to complain that the money has yet to reach them. Others have been slow to get their paperwork to Washington; Virginia has yet to send the Transportation Department its list of road projects. At the same time, some economists have questioned the administration’s claims that the bill has saved or created 150,000 jobs. Obama administration officials, however, say the pace of the stimulus program is on schedule, and even if the federal checks are not yet in the mail the effects of the stimulus are beginning to reverberate: the promise of the federal money has been enough to get states to start construction work and to retain some jobs that were in jeopardy. Vice President Joseph R. Biden Jr., who writes in a report on the stimulus bill to be released this week that it remains “ahead of schedule in most programs,” said in a telephone interview Tuesday that the bill was helping people grapple with the recession, getting money to the states and into the economy, and laying a foundation for long-term aspirations like high-speed rail. “We’re 85 days into a two-year program here — we’re trying to get the money out as quickly as we can, but not too quickly, so we don’t end up really screwing up here,” Mr. Biden said. “Because we’re talking about big dollars here, these are big numbers, this is unprecedented. And in 85 days we’ve gotten tens of billions of dollars out the door, and so far — knock on wood — no real big problems, no real big glitches.” The Transportation Department has committed to pay for more than $10.5 billion worth of projects across the country, which an official there likened to signing the paperwork for a new car before the check has cleared. Those commitments have spurred at least 20 states to award contracts and begin paying road crews; some contractors are staffing up, or postponing layoffs, in the hopes of winning some of that work. And the federal I.O.U.’s — the government has made $88 billion worth of commitments so far — have saved jobs in many areas. Columbus, Ohio, which sent layoff notices to its entire class of 26 police recruits in January, decided to rehire the class in February when it learned it would get a Justice Department grant. Alabama plans to keep 3,800 teachers whose jobs were in jeopardy, knowing that education stimulus money will soon be on its way. Utah is planning to rehire or retain about 45 probation and parole agents, court clerks, crime lab technicians, investigators and counselors on the promise of expected stimulus aid. Nonetheless, to the frustration of some local governments, the federal spigot has been more trickle than flood, and states are facing such fiscal pressure that many are cutting jobs anyway. When the Senate recently held a hearing on the spending of the stimulus money, Ray Scheppach, the executive director of the National Governors Association, told lawmakers that “to one extent this hearing is premature.” He reminded them that most of the stimulus funds “remain in the hands of the federal government.” When the bill was still in Congress, the need for speed was so important that the Obama administration agreed to funnel much of the money through existing programs to accelerate the process. The bill’s Republican opponents questioned the bill’s short-term effects, seizing on a Congressional Budget Office report that found that much of the spending would be pushed into later years. Now, a federal government that has often been caricatured as profligate has begun trying to spend money as quickly as possible and has become fixated, to use the new Washington catch phrase, with “getting money out the door.” The Obama administration has committed to spending 70 percent of the money, or $550.9 billion, within the first two years. By that benchmark, an administration official said, the government is 8 percent toward its goal. There has been skepticism of the administration’s claim of creating or saving 150,000 jobs. While it can be difficult to count jobs that were saved, as opposed to those that were created, Peter Morici, an economist at the University of Maryland, said that trends in state and local government employment “just do not support that claim.” Other economists have been more supportive of the administration. Mr. Biden said the stimulus had created some public works jobs, generated work at factories that expect to benefit from the work and kept many state and local governments from laying off workers, since stimulus aid will help them balance their budgets. But getting the money out can be a cumbersome process at times. Virginia, the last state to submit a list of transportation projects, is trying to get the work done as its Transportation Department is shedding 1,000 positions. Jeffrey Caldwell, a State Transportation Department spokesman, said that the agency had sought bids on some of the jobs anyway, so work could begin quickly when the list was done. Last week, the government reported spending more than $10 billion in stimulus money, and officials said that the speed would increase as the program grows. “In baseball terms, I think there’s going to be real pace on the ball here,” Mr. Biden said in the interview. “I think that what you’re going to see happen here is the velocity of this will increase not just arithmetically, but geometrically here. At least, we’ve got to make that happen.”
Calling it a stimulus package is a joke. If the purpose was to stimulate the economy, you could have provided a $787B tax holiday and it could have happened overnight. That, or just send out $787B in checks to taxpayers. This is a spending bill that is throwing money at Democrat pet projects. Note that most of the spending comes in 2010--just in time for Congressional elections. Hmm, coincidence? Me thinks not.
Hey DC, didn't you post something recently that said the government added thousands of jobs this last month. I don't follow this stuff closely . . . but I assumed all those jobs were created through the stimulus program. Reading this article, I guess I'm wrong. So what I now read is that the government really hasn't spent much of the approved money. Is this a bad thing?
66,000 or so added to do the 2010 census - it has nothing to do with the huge pork barrel spending bill. Yeah, it's a bad thing if it is really supposed to be a stimulus. We need something to get some cash into the hands of consumers (not banks, not GM) ASAP. The effects of a stimulus (like the rebates under the previous administration) did show, but they lagged by several months. So if the money's going to be spent in early 2010, then there's some merit to both the suggestion that the bill isn't really a stimulus one and the suggestion that it's a down payment for the next election cycle.
As if to reinforce my point about getting money in the hands of consumers... http://finance.yahoo.com/news/Retail-sales-drop-apf-15227744.html/print Retail sales dip raises worries about recovery Retail sales dip, foreclosures rise in April, raises new worries about start of recovery Martin Crutsinger, AP Economics Writer On Wednesday May 13, 2009, 5:56 pm EDT WASHINGTON (AP) -- Retail sales fell in April for a second straight month, dashing hopes that consumer spending was starting to revive and would help end the recession. Economists said families who are worried about layoffs and unpaid job furloughs are saving more and spending less, delaying the start of a sustained recovery. The disappointing report helped send stocks down on Wall Street, where the Dow Jones industrial average slid 184 points -- more than 2 percent. Other major indexes fell even more sharply. Retail sales fell 0.4 percent last month, worse than the flat performance many economists had expected, the Commerce Department reported Wednesday. Retail sales had posted gains in January and February after falling for six straight months. The gains had raised hopes that the crucial consumer sector of the economy might be stabilizing. But the setbacks in March and April retail sales cast doubts on that prospect. "People are obviously still very nervous and not spending," said David Wyss, chief economist at Standard & Poor's in New York. "The economy is still in a recession, and I don't think we will hit bottom until late summer or early fall." Meanwhile, more than 342,000 households received at least one foreclosure-related notice in April, up 32 percent from the same month last year, RealtyTrac Inc. said Wednesday. April was the second straight month with more than 300,000 households receiving a foreclosure filing. Analysts said the economy should benefit in coming months from the tax relief included in the $787 billion stimulus plan Congress passed in February. But the extra $17 a week that the average family will receive won't translate into a major boost in spending. Such modest relief is hardly enough to negate the effects of layoffs and employee furloughs, shrunken retirement accounts and home equity, and consumers struggling to boost savings because of fears about the future. Mary Goodman has stopped most of her extraneous spending -- like meals out. She reined in her spending habits after March 1, when she was laid off from her job as an office manager at an online job posting company in Milwaukee. Now the 60-year-old Goodman eats out just once a week with a former co-worker, a trip that included soup at an indoor market on Wednesday afternoon. "I'm not doing any clothes shopping," she said. "I'm not tempting myself by going into the mall." Anecdotal evidence had signaled some improvement in sales in recent weeks. But "to offset the plunge in wealth, the household saving rate still needs to double from the current rate of 4 percent," Paul Dales, U.S. economist with Capital Economics in Toronto, wrote in a research note. "With falling employment hitting incomes, this can only be achieved by a further retrenchment in spending." The savings rate, which was hovering around zero a year ago, has climbed to just above 4 percent. Many economists think it will hit 6 percent or more this year as workers anxious about layoffs and depleted investments put away their credit cards. The jobless rate rose to a 25-year high of 8.9 percent in April, with a net total of 539,000 jobs lost during the month. The fall in retail sales in April came even though car sales posted a 0.2 percent increase. Excluding autos, the drop in retail sales would have been 0.5 percent -- much worse than the 0.2 percent gain economists had expected. Sales other than autos showed widespread weakness last month. Demand at department stores and general merchandise stores fell 0.1 percent. Sales at specialty clothing stores dropped 0.5 percent. Sales also fell in April at furniture stores, electronic and appliance stores, food and beverage stores and gasoline stations, the Commerce Department said. The sales drop at department stores and specialty clothing stores came as a surprise since the nation's big chain stores had reported better-than-expected results for April. Same-store sales rose 0.7 percent last month compared with April 2008. It was the first overall increase in six months, according to the tally by Goldman Sachs and the International Council of Shopping Centers. The two reports aren't comparable, analysts noted. The government figures, for example, cover more stores and are adjusted for seasonal variations. Analysts said one reason the consensus forecast may have been too optimistic is that with many stores closing, it's been difficult to estimate industry figures accurately. Department store operator Macy's Inc. on Wednesday reported a wider loss for the first quarter, due partly to restructuring charges. Still, the company expects to see an improvement in sales from its localization efforts beginning in the fourth quarter of 2009, and in the spring of 2010. Liz Claiborne Inc. also reported a first-quarter loss that was worse than Wall Street expected. The apparel maker said its quarterly loss swelled on restructuring charges and a drop in same-store sales stemming from lower consumer spending and an extra week of sales in the year-ago period. In a separate report, the Commerce Department said business inventories fell 1 percent in March, a seventh straight decrease. That's the longest stretch since businesses cut inventories for 15 straight months in 2001 and 2002, during the last recession. Businesses are cutting stockpiles amid declining sales, a development that has intensified the current downturn. Still, the reductions in stockpiles eventually should help businesses get their inventories more in line with reduced sales. If that occurs, any strengthening in consumer demand should lead to increased production. Consumer spending grew 2.2 percent in the first quarter of the year, after posting back-to-back quarterly declines in the last half of 2008. Economists think the overall economy, as measured by the gross domestic product, will show a decline of around 3 percent in the current quarter. That would compare with steep declines of more than 6 percent each in prior two quarters, the worst six-month performance in a half-century. "The weak start to second quarter consumer spending is a potent reminder that that the recession is not over, despite signs of green shoots," said Stuart Hoffman, chief economist at PNC Financial. Goodman needs no such reminder. Despite her reduced spending, she said her son likely will have to move home from college because she can't pay his rent. AP Retail Writer Emily Fredrix in Milwaukee contributed to this report.
More money in the hands of consumers might just go under their mattresses at this point. But hey, don't blame me. I just bought a new car. barfo
That would be just dandy. At some point, they'll have enough to feel comfortable about going out and spending some, or maybe enough to buy a home or a GM made car.
Well, no, not really. How much money do you have to give a consumer that is worried about losing his job before he ceases to worry about money? I suspect it is a lot. And once he stops worrying about losing his job? He starts spending again even if you didn't give him a bonus check from the gummint. barfo
The last bunch of stimulus checks had a stimulus effect even though people saved a good chunk of the amount. If people do spend, it means demand for product and creates jobs. If they can't spend and the banks and credit card companies aren't lending money, then we're in a negative feedback loop situation.
The last bunch of stimulus checks went out back when the (perceived) economy was way healthier than it is now. I'm sure checks now would have some stimulus effect, but I'd think it would be significantly less than the last round. Indeed. barfo
No matter how you slice and dice it, people would be better off with a stimulus check than without it. And Obama is soooo inspirational and has the Bully Pulpit. All he has to do is read off a teleprompter and a lot of lemmings will go spend if he asks.
http://www.google.com/hostednews/ap/article/ALeqM5gII_eXwpVyrwITxM1gouPdCc--RgD985HVI00 FACT CHECK: Data belie Biden stimulus anecdotes By MATT APUZZO – 16 hours ago WASHINGTON (AP) — In his first quarterly report on the nation's stimulus package, Vice President Joe Biden uses anecdotes to paint a glowing picture of an economy on the rebound. In reality, the picture is incomplete and the colors far more muted. It is not disputed that Washington is spending historic amounts of money at a rate far faster than normal. Workers are getting tax breaks, Washington is picking up a greater share of state Medicaid costs and road construction projects are beginning. Even Recovery.gov, the Web site that has yet to live up to its billing as a one-stop way to track every penny, offers more information than typical government programs, and faster. But the effect of that spending is less clear. Many of the claims the White House is making are based on anecdotes selected to fit the Obama administration's message. For instance, the report cites a newspaper article about workers being rehired at a factory in Chicago. That account is true, but is no more an accurate snapshot of the nation's economy than a story, not cited in the report, about a Roanoke, Va., railcar factory closing. Capturing the full effect of the stimulus at this early stage is difficult, but the administration has set high bars for success. In championing those successes, however, the White House plays a little loose with the facts. ___ BIDEN SAID: First-time homebuyers are "driving increased activity in the home sales market," while mortgage and title companies are hiring more workers because of the first-time homebuyer tax credit included in the stimulus bill. THE FACTS: The report cites anecdotes from a New Orleans business journal to back up the claim. It's true, buyers are taking advantage of the $8,000 first-time homebuyer tax credits. The IRS said more than 567,000 tax returns claimed the credit in just the first weeks of the program. But that hasn't provided an immediate turnaround in the market. Since February, sales of existing homes have fallen 3 percent and new home sales are down .6 percent. And the number of jobs in the real estate industry has declined by about 20,500, according to the Department of Labor. There are signs that the housing market is improving. But the numbers suggest that if the market bottomed out, it did so in January, before the stimulus was passed. ___ BIDEN SAID: Employment agencies are placing more workers in jobs, and demand is up since February. THE FACTS: The report cites an interview with an employment service manager quoted in the same New Orleans business article. The anecdote may be true, but it's impossible to extrapolate that any further, even just to New Orleans. The city has lost more than 200 jobs since February. Overall, Louisiana lost 16,085 jobs over the same span, according to the Department of Labor. ___ THE WHITE HOUSE SAID: The stimulus has created or saved 150,000 jobs. THE FACTS: Since February, the nation has lost more than 1.3 million jobs, according to the Department of Labor. To make the case that the country created jobs over that same stretch, the White House has put forward a benchmark of jobs created "or saved." The argument is that the job numbers would have been even worse had it not been for the stimulus, and the difference between those numbers is a net positive. To visualize that disconnect, consider this: The administration has promised to create or save 600,000 more jobs in the next 100 days. Even if the nation loses another 5 million jobs during that span (a highly unlikely prospect) the White House could still claim success. There are few hard numbers when it comes to tracking stimulus jobs. The Obama administration numbers are based on estimates by the White House Council of Economic Advisers, based largely on a formula Obama's transition team put forward. It estimates the effect of tax breaks, government spending and social programs on job growth. Spending money will put people to work. But spending has a cost. At some point, Washington will have to pay for this program, either by raising taxes or interest rates, and those policies typically hurt job growth. The Obama administration's job data do not take into consideration this back-end cost, an omission some economists, particularly conservative economists, say is a flaw in the analysis.
Obama and maxiep are on the same page! http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsSb4qtILhg&refer=worldwide Obama Says U.S. Long-Term Debt Load ‘Unsustainable’ (Update2) By Roger Runningen and Hans Nichols May 14 (Bloomberg) -- President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries. “We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.” Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.” Earlier this week, the Obama administration revised its own budget estimates and raised the projected deficit for this year to a record $1.84 trillion, up 5 percent from the February estimate. The revision for the 2010 fiscal year estimated the deficit at $1.26 trillion, up 7.4 percent from the February figure. The White House Office of Management and Budget also projected next year’s budget will end up at $3.59 trillion, compared with the $3.55 trillion it estimated previously. Two weeks ago, the president proposed $17 billion in budget cuts, with plans to eliminate or reduce 121 federal programs. Republicans ridiculed the amount, saying that it represented one-half of 1 percent of the entire budget. They noted that Obama is seeking an $81 billion increase in other spending. Entitlement Programs In his New Mexico appearance, the president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare. He also said he was confident that the House and Senate would pass health-care overhaul bills by August. “Most of what is driving us into debt is health care, so we have to drive down costs,” he said. Obama prodded Congress to pass restrictions on credit-card issuers, saying consumers need “strong and reliable” protection from unfair practices and hidden fees. “It’s time for reform that’s built on transparency, accountability, and mutual responsibility, values fundamental to the new foundation we seek to build for our economy,” the president said. Obama called on Congress to send to him by May 25 a bill that would clamp down on what he says are sudden rate increases, unfair penalties and hidden fees. He also wants the measure to strengthen monitoring of credit-card companies. House Bill The U.S. House of Representatives passed the credit-card bill last month after adding a provision requiring banks to apply consumers’ payments to balances with the highest interest rates first. The bill also imposes limits on card interest rates and fees. The Senate continued debating its version of the bill today. It would require credit-card companies to give 45 days’ notice before increasing an interest rate. It would prohibit retroactive rate increases on existing balances unless a consumer was 60 days late with a payment. The president said Americans have been hooked on their credit cards and share some blame for the current system. “We have been complicit in these problems,” he said. “We have to change how we operate. These practices have only grown worse in the midst of this recession.” The American Bankers Association, which represents card issuers, has warned lawmakers and the Obama administration against taking punitive action or setting requirements that are too stringent. Doing so, the lobby group says, would limit consumer credit and worsen a credit crunch. Obama said that restrictions “shouldn’t diminish consumers’ access to credit.” Uncollectible Debt Uncollectible credit-card debt rose to 8.82 percent in February, the most in the 20 years that Moody’s Investors Service Inc. has kept records. Lawmakers have said they’re under increasing pressure from constituents to respond to rising interest rates and abrupt changes to consumers’ accounts. Obama held a White House meeting last month with executives from the credit-card industry, including representatives from Bank of America Corp. and American Express Co. Afterward, he told reporters that credit-card issuers should be prohibited from imposing “unfair” rate increases on consumers and should offer the public credit terms that are easier to understand. “The days of any time, any increase, anything goes -- rate hike, late fees -- that must end,” Obama said today at Rio Rancho High School. We’re going to require clarity and transparency from now on.” He also said the steps he has taken to stimulate the economy and start the debate on overhauling the health-care system are beginning to take effect. ‘Beginning to Turn’ “We’ve got a long way to go before we put this recession behind us,” Obama said. “But we do know that the gears of our economy, our economic engine, are slowly beginning to turn.” Taking questions from the audience, Obama repeated his stance that he wants legislation to overhaul the health-care system finished before the end of the year, saying it is vital to the economy. Health-care costs are driving up the nation’s debt and burdening entitlement programs such as Medicare, the government- run insurance program for those 65 and older and the disabled. The programs’ trustees reported May 13 that the Social Security trust fund will run out of assets in 2037, four years sooner than forecast, and Medicare’s hospital fund will run dry by 2017, two years earlier than predicted a year ago. To contact the reporters on this story: Roger Runningen in Albuquerque at rrunningen@bloomberg.net; Hans Nichols in Washington at =1871 or hnichols2@bloomberg.net
Well the difference between me and President Obama is that I'm actually concerned about it, and he's only pretending to be concerned. If he were really concerned by it, we wouldn't have had this ridiculous $787B spending package thrown around our necks like a flaming tire filled with gasoline.
