My brief review of the economic stimulus bill is that it will be too little to buoy a US economy that is dropping off of a cliff and is directed at the wrong areas. There are too many tax cuts, which will end up being saved rather than spent, and too little government spending, especially to state and local governments who will end up cutting tens of thousands if not hundreds of thousands of jobs, further increasing unemployment.
If you doubt that the US economy is dropping off of a cliff, then check out these graphs. First, from The Big Picture, personal consumption expenditures is falling at a rate not seen in over forty years:
And second this graphic on the change in industrial production now, versus the average of all post war recessions as well as the best case and worst case [from Brad Setser’s Follow the Money Blog]. If this were a “normal” recession, we would be starting to bounce back. This is not a normal recession.