Some sort of stimulus package is going to pass sooner or later.

Then keep an eye on state and local governments, because they could negate a good piece of potential positive impact by a little cost-shifting from now to the future.

Take, for example, infrastructure projects. If the feds pump an additional $100 million into repairing roads and bridges in Wisconsin and the governor or the Legislature take that as an opportunity to cut $100 million in state funding for road and bridge repair, what’s stimulated? If it is a dollar for dollar trade, we are exactly where we were before in terms of jobs and better roads and bridges.

The state may, of course, be able to use $100 million in saved state money elsewhere, but there is no guarantee that the new expenditures will create jobs and it is more likely the money would just be thrown into one of the gaping budget holes that already exist, producing exactly zero new jobs, but perhaps preserving some existing ones.

It also is possible that using federal money to supplant state funding would lower the state tax burden, at least a little bit. It also increases the future federal tax burden because that debt has to be repaid, and with interest! Our kids and grandkids could end up bowed by a tax burden for a stimulus package that never was allowed to stimulate.