Jul 3 2009, 11:42AM
Krugman: The Second Coming of the Stimulus?
Paul Krugman makes the argument for a second stimulus in this morning's New York Times. I dunno. I like the idea of sustained stimulus spending. But even if you ignore the big political problem that Paul raises -- passing through the eye of the financial storm is nothing compared to passing another big stimulus bill -- wouldn't this just run up against the natural limits of how quickly the funds can be spent?
A month and a half ago the Times reported that less than six percent of the first bill had been paid out. Obviously that needs updating. (Unfortunately, today counts as a holiday and I feel obligated to spend my time swimming rather than crunching the numbers.) But what I do know is that the amount of available funds from the first stimulus bill still vastly exceeds the money that federal agencies have actually spent. I know this because there's a big chart saying as much on the government's website for tracking stimulus spending:
There is no patience in this country.
The Fed and Treasury only began serious counter-measures last fall.
Obama's stimulus plan - too much - has barely been spent and shouldn't be wasted just to spend it faster.
Obama himself suggested that unemployment would surpass 10%. This is sureal. Everyone suits around saying - "this is the worst recession since the 30s, unemployment will pass 10%" and when it hits 9.5% people freak out. Mind you, unemployment was 10% in 1982 and we managed to recover nicely.
We simply live with hysteria and no sense of perspective anymore. No more stimulus please. Patience and common sense are need instead.