Why stimulus money goes unspent

[Image from CNN]

Above diagram indicates that states have drawn down only $15.6 billion of the $74 billion made available to them in the 11 weeks since President Obama signed the $787 billion recovery act. The process of is very time consuming. First, the states have to apply for the funds from different federal agencies, such as education, infrastructure, and health care. It usually takes long time for the money to be handed to the states, and after the fund is being approved, the states cannot use the funds immediately, they will have to go through the state legislature to have the funds put into use. Due to the time consuming process, some states decided to cut their budgets before the funds actually arrive.

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