Monday, August 22, 2011

Oh, Let's Just Continue to Fight Over the Deficit

Anxiety rises as stimulus dries up. Federal cuts may stall state recovery. (Boston Globe, 8/22/2011)

Excerpt: Massachusetts is running low on tools to boost the economy as the state exhausts its federal stimulus money amid renewed economic turmoil and looming budget cuts in Washington that could strip millions of dollars from key programs.

Of the $7.4 billion in US stimulus funds awarded to the state in 2009, only about $300 million, or roughly 4 percent, is left to deploy, according to officials in Governor Deval Patrick’s administration. Most of the stimulus programs will wind down during the next six months - when officials said the state will most need help in staving off a second recession.

“We’ve got to keep up a head of steam right now, and I wonder whether we’re going to be able to keep it going,’’ said Jeffrey Simon, director of the Massachusetts Recovery and Reinvestment Office, charged with overseeing the state’s stimulus funds. “I see the positive impact it’s had on people here, so I’m a little puzzled by what’s going on in Washington.’’

Although economists debate the overall impact of the $787 billion stimulus package, most agree on two points: It acted as a buffer against the worst downturn since the Great Depression by creating much-needed jobs; at the same time, however, it has failed to lift the economy out of a malaise that appears to have deepened in recent weeks

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