WSJ: The Stimulus Didn't Work

The Wall Street Journal claims that the $787 billion stimulus package hasn't worked (at least thus far). Their research appears compelling.

They include a helpful graph (above).
- DPI: Disposable Personal Income (total amount of income people have left to spend after they pay taxes and receive transfers from the government)
- PCE: Personal Consumption Expenditures (comprehensive measure of how much consumers)

Conclusion:

"Incoming data will reveal more in coming months, but the data available so far tell us that the government transfers and rebates have not stimulated consumption at all, and that the resilience of the private sector following the fall 2008 panic--not the fiscal stimulus program--deserves the lion's share of the credit for the impressive growth improvement from the first to the second quarter. As the economic recovery takes hold, it is important to continue assessing the role played by the stimulus package and other factors. These assessments can be a valuable guide to future policy makers in designing effective policy responses to economic downturns."

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