re: #480 lawhawk

Most of the stimulus package was actually transfer payments to the states to keep them solvent and give them a chance to balance their budgets without having to make even more drastic cuts.

Problem was that many states didn’t change things one iota. They kept spending, even as tax revenues dropped further still - and are facing gaping deficits due to a drop in revenues and a cessation of stimulus funds - meaning that the doomsday budgets are arriving this year, rather than in the midst of the recession. In that sense, the stimulus prolonged the consequences of the recession but kept it from being even deeper.

Had the focus really been on infrastructure, those hundreds of billions could have resulted in real and lasting improvements to the nation’s infrastructure for generations to come - with projects across the nation getting needed funding - whether it was highway improvements, rail upgrades, tunnel projects, etc.

The problem with infrastructure spending as stimulus is that it is very slow. A big project takes a long time to get off the ground. As a result, most of the stimulus dollars that went for infrastructure were for things like road repaving: stuff that was in the pipeline or easy to fire up without a huge engineering front end. By design, you would want that 2009 stimulus money to recirculate quickly, which a lot of it did. The transfer payments to the states were like that: that money moved quickly, and saved jobs, at least in the short term. Which was the point. Did it delay a day of reckoning? You bet. Would it have been a good thing for our economy to have that day in 2009? Not hardly.