Saturday, August 1, 2009

Stimulus Did Not Actually Boost 2009.Q2 GDP

The benefit of government spending to 2nd quarter GDP is almost exclusively in defense spending, which was not part of the $787 billion stimulus package. The stimulus' non-defense spending has had a neglible effect on GDP.
GDP Non-defense federal government spending provided a 0.15 percentage point boost to GDP, while state and local government spending contributed 0.30 percentage points, according to the Commerce Department. Federal spending jumped nearly 11%, though much of it was in the defense arena, while state and local government outlays increased 2.4%., Stimulus has yet to really boost GDP.

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