As I noted last week, Friday’s jobs report was awful. Now people are wondering where the $787 billion went that was supposed to stimulate an economic recovery. It turns out that much of it hasn’t been spent. In fact, less than 1% of the money target for highway and infrastructure spending has been spent! If it doesn’t get spent soon, then it probably won’t be spent until next summer since many states can’t do roadwork during the winter.
There are now calls for a second stimulus program. What’s happening is that the “velocity” of money, which is how quickly money changes hands, has ground to a halt. The economy has basically frozen up. The federal government, apparently in an effort to not waste money, has been extra slow to hand out stimulus money.
Infrastructure and road work has been held up due to silly things, such as a requirement that signs must be displayed to show that government money is being used on road projects. Even though his economic problems were inherited President Obama promise that the $787 billion stimulus package would create jobs is starting ringing hollow. More than 2.6 million jobs have been lost since he became been president. Let’s hope we see the velocity of money improve soon.