Fiscal Stimulus Leakage

We have had huge fiscal stimulus by the US govt and the US govt has also bailed out many of the big banks. We should have seen huge increase in economic activity given the size of the stimulus but the unemployment is still high. I was discussing this with a friend a week back. One of the thing that came up was the high leakage of the fiscal stimulus overseas due to the heavy automation of the infrastructure work in the US - the stimulus was supposed to be aimed at shovel ready infrastructure projects. One thing is that there were not many shovel ready projects to immediately fund and so the fiscal stimulus is only slowly seeping into the economy. The other interesting thing relates to the heavy automation of infrastructure work. Say 20 years back, they needed 10 people for a road laying job. Now that same job may require only 3 people with machines being able to replace the other 7 people. If $100 was spent earlier on 10 people, now $30 may be spent on 3 people and $70 to buy the machines. So a big chunk of the money is being spent to buy the machinery. If the machinery was made in the US, then that money would eventually end up as wages to the US workers. But that machinery is made in China, Japan or Korea and end up supporting employment overseas. The govts of these foreign countries end up getting the $70 and then they lend it to the US govt by buying US Treasuries. In effect, the US govt tried to spend $100 in the US economy but only $30 got into the US economy and the other $70 came back to fund the US deficit. So the the US govt spending is currently not as effective as it would have been previously when many of the manufacturing jobs were in this country. The US govt now has to do repeated stimulus to get the same effect of a past stimulus. and the US stimulus ends up stimulating the rest of the world (supplying the manufactured products to the US economy) more than the US for every $1 spent by the US govt.