White House economist Austan Goolsbee made a great point about the stimulus yesterday at our financial crisis conference in Washington. I don’t have a transcript yet, but the gist was: One reason it’s wrong to dwell on the fraction of stimulus money that’s been distributed so far is that it misunderstands the difference between obligation of money for a project and actual payment for the project. Obligation means the government tells a contractor "we will pay you X if you deliver Y on such and such a date." The payment itself doesn’t happen until the date of completion, or at least till various benchmarks have been met.
Put differently, the contractor begins hiring and spending--which is what we really care about--once the money gets obligated, even though the government may not actually disburse the money until months or years later. So the obsession over actual disbursement is a bit misguided.
Goolsbee says that, accounted for this way, we've felt about one-third of the effect of the stimulus so far.