Early Impacts of the Stimulus

The White House is already touting some positive impact of the stimulus legislation as Caterpillar says they’ll re-hire laid-off workers, telecom companies get ready for a surge of broadband work, and even contractors in Michigan are feeling optimistic.

Realistically, though, the largest impacts of the stimulus are going to be things that are hard to see because they’re things that aren’t happen. State governments will lay off or furlough workers, but they’ll do less of this than they would have done had the stimulus not passed. Which means those employees will spend more at their local retail outlets than they otherwise would have done. So the retailers of the country will lay off fewer workers than they otherwise might, and low-cost retailers may add jobs and capacity faster than they otherwise might.