Well, this won't do much to raise aggregate demand:
The Social Security Administration sent about 89,000 stimulus payments of $250 each to dead and incarcerated people--but almost half of them were returned, a new inspector-general's report found.
The agency was charged with distributing the one-time payments, worth about $13 billion in total, as part of the economic-stimulus package passed in February 2009. Most of the payments were made in May 2009.
This is unfortunate and wasteful. But it is not, as Sen. Tom Coburn claims, reflective of the "broader problems with the Recovery Act."
The Recovery Act required the government to send a $250 check to each of the 51 million recipients of Social Security for retirement and disability insurance. Direct checks were central to the first stimulus passed under Bush, and the second stimulus signed by Obama. One fifth of one percent of those Social Security checks went to dead people. Half of the money was returned. Nobody is celebrating a $12 million loss. But we're talking about 0.1% error in a program that itself composed only 1.6 percent of the stimulus.
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