Krugman: The Second Coming of the Stimulus?

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Paul Krugman makes the argument for a second stimulus in this morning's New York Times. I dunno. I like the idea of sustained stimulus spending. But even if you ignore the big political problem that Paul raises -- passing through the eye of the financial storm is nothing compared to passing another big stimulus bill -- wouldn't this just run up against the natural limits of how quickly the funds can be spent?

A month and a half ago the Times reported that less than six percent of the first bill had been paid out. Obviously that needs updating. (Unfortunately, today counts as a holiday and I feel obligated to spend my time swimming rather than crunching the numbers.) But what I do know is that the amount of available funds from the first stimulus bill still vastly exceeds the money that federal agencies have actually spent. I know this because there's a big chart saying as much on the government's website for tracking stimulus spending:

recovery spending update early july.png
The difference between the blue and yellow lines is the amount of money federal agencies have available but haven't yet spent. So here's a question for Krugman: wouldn't passing another stimulus bill increase this gap rather than inject more spending immediately into the economy?

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Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.
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