However, you can find information about the various bills passed, and so I decided to look at the recently passed recovery act to see if it might help.
Below is a chart listing the various amounts in by the bill (including tax breaks). Bear in mind that the total is about $780 billion, which if we assume a GDP of about $14 trillion, is roughly 5% of our economy's value. That's a significant sum. Will it do any good?
Below, I have summarized the various types of allocations, with positive portions in green (that is to say, positive or at least neutral), and negative portions in red.
Unfortunately, much of the bill plays the usual shell game of aspiring to "create" jobs and growth, but it really won't. The fundamental reason is that the government does not create anything. It only has the power to move money around and mandate actions. Spending money trying to create jobs simply takes money from some and gives it to others. Basically, it takes it from private, profitable uses, and moves it to less-profitable mandated uses, such as "green energy".
It is a fatal conceit of government planners that they think they know how to use our money better than we do. Such uses will result in less economic growth and draw out the recession by leaving productive businesses with less capital. It will likely result in inflation down the road. And it will create business sectors dependent on government funding, which if removed, will cause them to fail: a recipe for more spending in the future.
|$237.0||Tax relief for individuals||OK, but not as effective as business cuts, because they are the ones who will make investments to grow the economy.|
|$51.0||Tax relief for companies||This is 0.3% of GDP. That does not seem like enough to do much for such a depressed economy.|
|$147.7||Healthcare||Ultimately the government should not be in healthcare. This will not produce more prosperity.|
|$90.9||Education||Same for education. This will not produce prosperity, and the solution to the woes of public education is to end it. (I am aware that a good education is necessary to do well in some jobs, I simply don't think it should be provided by the government)|
|$82.5||Employment||This is partly paying people to be out of work. Some of it, such as food bank funding, needs to be left to private charities, who would have more money if government would stop ruining our economy.|
|$80.9||Infrastructure||Inasmuch as government has infrastructure to maintain, this is OK, but government's role in infrastructure should be reduced.|
|$49.7||Energy||This is a 100% boondoggle. Most of this moves money from profitable ventures into less profitable ones (green energy). It will not help growth, it will result in economic dislocation and stagnation, and create more businesses dependent on government funding.|
|$12.7||Housing||Some is infrastructure repair, but much is just welfare.|
|$8.9||Scientific research||Dr. Stadler would be disappointed, but I have to nix this one. Government should get out of science.|
|$17.2||Other||Some of this is for law enforcement, the rest should be cut.|
The best items in the bill are the tax cuts, although the usual altruist mistake is made of shortchanging business. It is businesses that will drive the recovery, not people paying rent and buying TVs, because business has the power to expand capacity and create new jobs.
Furthermore, if you look at the details of the business tax portion, $7 billion actually refers to the repeal of a credit, and $15 billion is for credits for renewable energy activity, which encourages economic growth in unprofitable areas. This will not spur growth, this is simply a policy decision, which will actually cost us in growth.
If I understand correctly, only $116 billion of the individual tax items will result in cash in hand in 2009 (the payroll tax credit, which I think means less will be withheld) and it's only $400 per individual; the rest are applicable for filing 2009 taxes next year, which means they will not help the recovery. This represents less than a 1% shift in the way money is spent in 2009, and it really does not address the fundamental problem: housing.
There is an $8000 home buyer credit, which I discussed here. That is a small positive, and is the only thing that addresses one of our real problems. Unfortunately I have been unable to determine what percentage of the unsold housing market this represents, but I can't imagine that $8000 is going to get people to run out and buy up all the existing homes. The dollar value of $6.6 billion is 5/100 of 1% of GDP.
Bottom line: I give the bill a grade of "D" in terms of recovery potential. Most of the spending consists of bad investments that will delay recovery, and the tax credits that could spark recovery are not big enough, or come too late. The rest is maintenance on existing programs, which of course keeps money out of the hands of private investors. I predict a very small effect for this bill on our economic recovery in the housing sector, and a small effect in terms of household spending. Of course, a spending bill does nothing to increase the fundamental freedoms of business to operate effectively. At best, it looks like a very small nudge.