Chart of the Day: Stimulus #FAIL

Over at the Washington Examiner, David Freddoso points to numbers from the Bureau of Economic Analysis that show that despite the stimulus bill, which included some tax credits that led to an increase in disposible income, consumption has remained stagnant.

Freddoso notes:

The numbers released this morning for the first quarter of 2011 indicate that no, it didn’t. Americans spent less of their income than in the previous quarter. A nearly 6 percent, the savings rate is way up from its 2005 nadir of 1.2 percent, and its 20-year average of 4.25 percent.

Not to say that increased savings is a bad thing — in fact, the average since World War II is above 7 percent. But it is still another indicator that the stimulus package has not worked as promised. For all the White House concerns about trickling out the money in small doses in order to “trick” people into spending more, it just hasn’t worked. People don’t spend money just because government starts shoveling it out the door. They also need to feel secure about their jobs and their futures — a feeling that the huge dose of government deficit spending has not created.

Here is the chart comparing the disposable income (blue) and consumption (red). Note the spikes in blue. Those spikes in personal income are giveaways of taxpayer money from Congress, such as the rebate programs passed under the Bush Administration. And you can see, that just like under Obama, they failed miserably. So much for Keynesianism.

BEA numbers


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