The premise of the stimulus is that it will get money -- now! right now! -- into the hands of folks who will spend it. An immediate, "dramatic" jolt to the economy of near-unprecedented size is the promise. But the as-delivered still doesn't fully meet that standard.
The most recent version of the stimulus has three parts (CBO's blog; detailed version): tax cuts, direct payments, and government spending. It's important to keep these parts separate. They have different timeframes, different purposes, and different effects. Tax cuts are, well, tax cuts. They happen pronto. Direct payments are payments that go directly into the pockets of private actors: tax rebates, unemployment benefits, and the like. Also pronto. Government spending is everything else, from the new toilet seats for the State Department to the much-lauded green initiatives to reduce greenhouse gases. Government spending takes place over a period of time.
There is nothing that says that a single bill needs to contain all three parts. And it's obfuscating, not illuminating, to lump all three parts together and proclaim to goodness of the heterogeneous whole. Each part - tax cuts, direct payments, government spending - rises and falls on its own merits.
The results of this analysis are simple: the tax cut and direct payment portions of the package have immediate impact. According to the CBO, these portions get paid out now, with substantial payments in 2009 and a larger lump-sum in 2010. Very little paid out after that point. They sunset.
Government spending is a different story. Spending is the single largest portion of the bill when you consider the entire ten-year period at issue, 2009-2019. But spending has the smallest impact -- by far -- in the critical 2009 time period. The government spends more in 2010, but spending is still dwarfed by tax cuts and direct spending during that critical year as well. By 2011, the government is still spending over a hundred billion dollars. Tax cuts and direct payments have been dropped to near zero: the "stimulus" package is now mostly government spending. But 2011 is also after the end of the recession by many forecasts.*
So: most of the government spending won't occur until after the recession is projected to end. That's approximately $214 billion of $358 billion spent after 2010, too late to be counted as part of the so-called "jolt" to the economy. Worse, the $140 billion-or-so in government spending during the 2009-2010 period primarily goes to boosting the government agencies (buying cars, expanding buildings, hiring staff) that will then incur continuing costs to maintain. Those are the easiest way, after all, for the government to spend money quickly -- but they are not the kind of shovel-ready infrastructure projects or forward thinking "green" endeavors that have been sold to the public. And these kinds of government appropriations have real maintenance costs that extend well beyond the life of the stimulus package.
Now, this doesn't mean that there are no worthy parts of the government spending package. I, for one, would appreciate some additional spending to assist our overstretched military, as well as targeted spending (or, better, tax rebates and vouchers) for technology, education, and the fabled green revolution.
But let's not lose our heads and throw money at a problem just because we can print money to throw. Lumping government spending in with tax cuts and direct payments as part of a so-called "stimulus" package is a mistake.
*CHANGE: I changed "most forecasts" to "many forecasts". I also added a link. I haven't attempted a survey to find out what "most" folks are thinking, but credible sources project an end to the recession in 2009 or 2010.
UPDATE: Br, in comments, notes Kevin Drum's post on the subject, in which Drum argues that "spending" equals $600 billion or so and most gets spent in the first two years. That's obviously different from the above and, needless to say, different from the CBO's estimates (which is the basis for the above). My suspicion is that Drum is lumping "direct payments" in with "government spending" (or "government appropriations," per the CBO). If so, it's disingenous: giving a family a $500 tax rebate (a direct payment to a private citizen) is different on any number of critical levels from spending $500 dollars to buy a bunch of new chairs for the government (government spending).