Did the Stimulus Quench America’s Economic Thirst?

Graphic Art

For the next financial crisis, what would be the best way to spend stimulus dollars? While some economists suggest a national fire sale and some pharmacists heaping helpings of hormones, an examination of how the current stimulus-dollar cascade has helped or hindered the recovery bears examination.

That’s what graphic artist Stanford Kay has done with buckets of data drawn from the Congressional Budget Office’s scintillating bestseller from last September, “The Economic Outlook and Fiscal Policy Choices,” plus the Bureau of Labor Statistics and Department of Commerce.

While what strange fruit may arise from the downpour of dollars will not be fully known until 2015 or even beyond, some key bits of knowledge can be harvested. Perhaps the most standout fact based on the policy debates that actually happened: spending on unemployment is an excellent way to get stimulus spending stimulating quickly, while reducing income taxes going forward is among the slowest. Reducing employee payroll taxes — think of the 2 percent reduction in Social Security withholding in the U.S. this year — falls roughly in the middle.

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