Stimulus? What Stimulus?

Look what arrived in my inbox last night (from the abstract):

"This note shows that the aggregate fiscal expenditure stimulus in the United States, properly adjusted for the declining fiscal expenditure of the fifty states, was close to zero in 2009. While the Federal government stimulus prevented a net decline in aggregate fiscal expenditure, it did not stimulate the aggregate expenditure above its predicted mean. We discuss the implications of limitations on states' ability to run deficits for the design of fiscal stimulus at the federal level. We devote particular attention to intertemporal moral hazard concerns in a federal fiscal system, and ways to address these concerns."

A nearly US$800 billion stimulus package, which had the effect of raising total US government spending by virtually nothing. Keynes would be rolling in his grave.

And what I wouldn’t give to see timely quarterly data on consolidated Malaysian government expenditure and revenue (we only get annual data through the Economic Report).

Technical Notes:

"On the ease of overstating the fiscal stimulus in the US, 2008-9", Aizenman, Joshua & Gurnain Kaur Pasricha, NBER Working Paper No. 15784

UPDATE:

There’s a shorter version of the paper over at VoxEU.