Krugman: The Second Coming of the Stimulus?

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?