Mish sends us to “Track the Money,” recovery.gov’s breakdown of where funds have been sent and spent.
He’s not happy, but I suspect he’s suffering the Jared Bernstein Problem: only looking at one side of the equation.
But—and this is the key “but”—the reason it is right to do that is that ARRA money has two-way flow. It supports jobs and production, both priming the pump and moving production forward. This works if (1) the cost is minimal and (2) the production will be saleable (avoid the “double-dip”). Which implies (1) domestic interest rates must remain near zero and either (2a) U.S. consumer demand for domestic goods must increase or (2b) the U.S. dollar must depreciate, making our goods more desired abroad.
All of the above is reasonable and conceivable, even if it does imply the stock market may be overvalued.
But that’s the stimulus. The bailout money, well, that’s another question. And another post.