From CNN Money:
The federal government has made available more than $74 billion in stimulus funds, but the majority of that money has yet to hit the streets.
Here is “why” monetary policy is usually preferred over fiscal policy:
That’s because states have to jump through hoops before they can claim the funds and put them to use. Some have to get approval from their legislatures before they can spend the money. Others must wait for municipalities and school districts to submit applications to state agencies before distributing the dollars.
These are some of the main reasons why states have drawn down only $15.6 billion of the $74 billion made available to them in the 11 weeks since President Obama signed the $787 billion recovery act. Nearly $14 million of that amount has gone to help states handle the crush of Medicaid expenses.
The “discretionary fiscal lags” are real. This could lead to a rush of bad projects just to obtain some more federal funding. This rush could lead to taxpayer waste.