Back in January, US unemployment was sitting at 7.2% and commentators were saying a stimulus package would fix everything. It hasn't. The latest appalling figures show that US unemployment has hit 10.2%, a 26-year high. Worse still, the total unemployment figure including people who have either been forced to work part time or who have given up looking for work is now 17.5%.

Clearly, the stimulus package isn't working. One reason is the problem with all government spending packages - it takes too long for the money to get to the problem. Secondly, there are political machinations. As this New York Times piece point out, 84% of the $1.05 billion in "green" stimulus funding distributed since September had gone to foreign companies building renewable energy projects in the United States — mostly wind projects and overseas banks are seeking to reimburse themselves with money from the package.

The Economist says things will pick up but creating jobs will require more spending. This time, it needs to be better targeted. With voters this week rejecting Democratic candidates to be governors in Virginia and New Jersey in part because of concerns about the economy and government spending, Obama will have to tread very quickly. The politics could bring everything undone.