Stimulus Update + New Free Report
Remember the economic stimulus bill? You know, the sprawling $787 billion American Recovery and Reinvestment Act (ARRA) of 2009 that most wholesale distribution executives expect to have no impact on their business? Although the stimulus bill has dropped off most people's radar screen, the money flow is now starting. Keep an eye on the timing of outlays – 2010 could turn out to be an unexpectedly strong year for the economy given the likely spending pattern by the Federal and state governments. For more details about the stimulus bill, I suggest that you download my free report called Economic Stimulus Opportunities for Wholesale Distributors, courtesy of IBM. This report is an abbreviated and annotated version of my March webcast. As a reminder, my analyses show that wholesaler-distributors and their suppliers will benefit most from the money spent directly by the federal government and the money transferred to state governments for spending. Far too much money of the ARRA money is being spent on non-stimulative social programs. Nevertheless, I estimate that about $200 billion in direct and indirect spending – about one-quarter of the $787 billion total spend from 2009 to 2019 – will impact wholesale distribution companies. The timeline for many appropriations to states requires half of the funds to be obligated – not spent – by September 2009. In other words, states must identify the specific uses and projects for the funds by the obligation timelines, even though the actual funds will not be spent by this deadline. Vice President Biden puts a positive spin on the progress in the first Quarterly Report To The President On Progress Implementing The American Recovery And Reinvestment Act Of 2009. Check out the chart on page 5 of the Biden report. Most of the outlays will be hitting in 2010, just when the economy will likely be moving into recovery. (See 2009 Economic Growth and You.) The funds with the most relevance to wholesaler-distributors will spent in the 2010 to 2012 period. (See page 14 of Economic Stimulus Opportunities for Wholesale Distributors.) Meanwhile, here's the latest bailout request: (Hat tip to Greg Mankiw's blog.)
