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Still Waiting for Stimulus Stimulation

Christopher Barker
March 25, 2010

If trickle-down economics is a tired old model plagued by frequent clogs in the plumbing, then ongoing efforts to promote domestic growth through debt-based stimulus packages has yet to even build the pipes.

Some 14 months have passed since I reported that industrial behemoths like Caterpillar (NYSE: CAT  ) and U.S. Steel (NYSE: X  ) noted only scant allocation to infrastructure and related industrial catalysts within a $787 billion stimulus package that indeed helped to ease some of the panic on Wall Street. When I spoke to Nucor (NYSE: NUE  ) CEO Dan DiMicco last November, he called the measure "a welfare package that did nothing to create jobs". As recently as December 2009, Commercial Metals (NYSE: CMC  ) observed "no discernable stimulus effect," but offered hope that some impact "may finally be evidenced by spring."

Now that spring is in the air, I suspect you will hear plenty of anecdotal evidence to the effect that stimulus spending is finally bearing fruit and paving the way for a sustainable U.S. recovery. With 730 allegations of waste or fraud surfacing thus far, combined with the recent $75 billion upward revision of the cost of the stimulus, the pressure is on Washington to show some tangible results.

Let's forget for a moment that China has just completely schooled us on how effective a stimulus package can be when it adequately targets the productive sectors of an economy rather than perpetuating a broken, debt-dependent, consumption-driven economic structure. While road crews have been out in force across this nation laying down