A Huge Chunk Of The Old Stimulus Hasn't Even Hit The Economy Yet
Vincent Fernando, CFA
Despite talk about how the U.S. economy will soon lose the support of economic stimulus, or that stimulus 'hasn't worked', U.S. fiscal stimulus for the economy is far from finished, and this doesn't even consider additional measures being debated.
This is because a large chunk of the 'old stimulus' hasn't even hit the economy yet.
As shown above using data from ProPublica, 35% of the government's $790 billion original fiscal stimulus program (started in early 2009) is still on the way. 'Tax cuts remaining' and 'stimulus money either unspent or in progress' total $278 billion dollars.
This $278 billion will likely be delivered by the end of 2010, and it's a huge sum for just four months. Thus the remainder of 2010 will continue to be supported by stimulus, and investors should take note. 2011 is when the economy will lose its training wheels, though an additional round of economic initiatives currently being debated could push the timeline back even further.
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