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Overview of proposed economic stimulus package

Zacks Investment Research offers a detailed overview of the stimulus package introduced last week. It covers the expected “Caterpillar will benefit” angle but also explores a raft of other ways the money will be spent. I liked this part:

Aid to Those Hit Hardest – $106 Billion:

This includes $43 billion for extended unemployment benefits, $39 billion to help those laid off keep their COBRA health benefits, $20 billion to increase food stamps and $4 billion to increase some social security benefits.

These sorts of expenditures are among the ones with the most ‘bang for the buck’ in terms of stimulating the economy. People who are really on the ropes financially are likely to spend the money quickly, which will increase the number of jobs in the economy.

Most econometric studies have found that these sorts of expenditures result in more than $1.50 of economic activity for every $1.00 spent. This is in addition to the obvious humanitarian benefits.

“Humanitarian benefits” rank as “nice to have” but far down on the priority list. Gotta love coverage written for the investor class.

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Tom Mangan posted at 9:22 am January 19th, 2009 |

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