×
I've not spent much time on the weird kerfluffle over the secret CBO report showing that most of the stimulus wouldn't be spent before 2010 because, well, we didn't get to see the CBO report. And now Tim Fernholz reports that there was no CBO report, but instead a preliminary analysis of the spending schedule for one portion of the bill. And it was performed before January 15th. A full CBO analysis will be coming next week, and so too will an OMB analysis, and there will be plenty to debate then. (The OMB, incidentally, is already saying that their estimates show that 75 percent of the stimulus will be in the economy before 2010. I've posted their letter to Senator Kent Conradfor download">.)Then there's the question of whether it's a problem for the stimulus spending to continue past 2010. And here the answer is, well, no. In fact, we're going to need it. Dean Baker comments:
It is important to remember that fiscal year 2010 ends on October 1, 2010. The Congressional Budget Office projects a year-round average unemployment rate of 9.0 percent for 2010, with unemployment rising at the beginning of the year and falling at the end. This projection implies that CBO expects the baseline unemployment rate to be around 9.0 percent in October of 2010, at the end of the fiscal year, nearly two percentage points above the current level. If the CBO baseline projection is accurate, then we should be glad that the stimulus package will sustain spending into the 2011 fiscal year.Nine percent unemployment is not exactly full employment. It's also worth noting that if the Republican plan is to kill off any infrastructure spending that continues past 2010, the infrastructure portions of this bill won't be very good at all. Now, maybe that's okay. According to Frank Luntz, infrastructure is currently more popular than jelly donuts and excited puppies. Maybe we do real infrastructure in another bill. But given that this recession is likely to continue for years yet, and given that post-recession consumption is going to be far lower than what we've known amidst all these giddy years of bubble-driven spending, there's really no reason not to include a far-reaching infrastructure component in the final bill. And if we're going to argue that the stimulus bill is also meant to address our infrastructure problems, then we need to take seriously infrastructure projects that are good projects rather than instant projects. A worthwhile priority that's shovel-ready in February 2011 is still worth funding.
