How Stimulating Is The Stimulus?

Unless you have been living in a hole for the past year you are aware of the American Recovery and Reinvestment Act (ARRA). This law is the mother of all intergovernmental grant programs with $275 billion of its $787 billion being allocated for intergovernmental grants, contracts, and loans. When the bill was passed into law it did so with three main goals:

1) Create new jobs as well as save existing ones
2) Spur economic activity and invest in long-term economic growth
3) Foster unprecedented levels of accountability and transparency in government spending

When examining the data a bit closer it becomes apparent that, to this point, the ARRA has a long way to go before it reaches its goals (the first two anyway...which are arguably the most important). During its first reporting quarter the number of jobs being saved/created by the ARRA was about 640,000. During its second reporting quarter that number dropped by over 40,000 jobs (more information on ARRA job statistics can be found here). With unemployment levels remaining high across the country, it is unlikely that the reduction in jobs being created/saved by the ARRA is due to an overall improvement in the economy.

Instead, a more likely explanation just might have something to do with the snail's pace at which funds are being allocated out to various state governments and agencies by the federal government. As of January 29th, 2010, only $74.4 billion of the $275 billion in ARRA funds allocated for intergovernmental loans, contracts, and grants hadbeen received. That means that in one year the ARRA has managed to barely give out 25% of its allocated funding for grants. Stories like this one, reporting a lack of stimulus funding, can be found all over the internet.

I am not naive to the fact that in bureaucratic terms 25% of funds allocated of the largest stimulus bill ever in one year isn't all that bad. But I don't think I would be going out on a limb if I were to suggest that the average American might have expected the government to act at least a little bit quicker, seeing as the economic crisis hasn't exactly been fixed up to this point. Perhaps someone can comment as to why things are taking so long.

In case you are wondering, Minnesota has received roughly 38% of it's allocated grant funding from the federal government and has spent roughly 72% of those funds. More information on Minnesota and the ARRA can be found here and here.

Finally, just for some fun, a little recovery.gov humor...

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