Slow Motion Stimulus

The stimulus is premised on fast action. Hurricane Katrina relief was also premised on fast action. But, three and a half years later, FEMA records show two-thirds of $5.8 billion meant to repair flooded schools, libraries, sewers and roads is unspent.

Roadblocks and bottlenecks will likely be a feature of the stimulus. With so many different programs targeted to similar sounding goals, you can be certain that regulatory communication breakdowns between agencies and state and local governments will be frequent. Localities and states will have to become experts on regulatory details that govern the use of funds — and be careful not to assume they can combine funding streams for an identified project.

If Hurricane Katrina aid is a guide, the stimulus spending will be anything but immediate.