The Stimulus is Working, Right?
So says the Wall Street Journal:
The U.S. economy is beginning to show signs of improvement, with many economists asserting the worst is past and data pointing to stronger-than-expected growth. On Tuesday, data showed manufacturing grew in August for the first time in more than a year. "There’s a method to the madness. We’re getting out of this," said Brian Bethune, chief U.S. financial economist at IHS Global Insight.
Much of the stimulus spending is just beginning to trickle through the economy, with spending expected to peak sometime later this year or in early 2010. The government has funneled about $60 billion of the $288 billion in promised tax cuts to U.S. households, while about $84 billion of the $499 billion in spending has been paid. About $200 billion has been promised to certain projects, such as infrastructure and energy projects.
Economists say the money out the door — combined with the expectation of additional funds flowing soon — is fueling growth above where it would have been without any government action.
The good news is getting into the local papers, too, with the Houston Chronicle predicting job losses in Texas to be bottoming out, for example.
So, horray for the economy! It worked! Right?
The question is, as usual: Have we touched the fundamentals? Financial reform? Not so much. Redoing tax policy? Not yet. Health care? Maybe.
Somehow, I’m left wondering if we’re just setting ourselves up for another fall.