“Oooh, Honey! We’re going to get a $1,200 check from the government! Where do you want to spend it?”
“How about paying the electric and water bill, paying the credit card balance, and paying the mortgage so that we can spend another month in this house without foreclosure?”
“Oh, you’re no fun. We could put it into our grocery and travel budget, at least, given that food and gas prices are going through the roof.”
“Yeah, to buy the same amount of food and gas that we could get a year ago for half as much money. Besides, we can’t really spend that money. We’re going to have to pay it back.”
“What? No one said anything about having to pay the rebate back!”
“I noticed. But where do you think that money to back up that $1200 check comes from? Xanadu?”
“Well then, where does it come from?”
“The federal government’s budget. Who pays for that budget? We do, with our taxes.”
“So, they’re going to have to raise our taxes in order to pay for the $1200 check they’re sending us?”
“Or they’re going to have to cut government services, which will take money out of the economy and unravel any benefit that this supposed economic stimulus has created.”
“Surely there’s an alternative.”
“Yes, there is. They can just add the amount onto the national debt, so that later, they government will have pay its debtors the same amount of money, plus interest, and tax us even more, or cut spending on critical government programs even more.”
“Kind of like what we did with our credit cards.”
“Exactly. So where do you want to spend that $1200?”
“I wish I could rip it up.”
In order to really stimulate the economy, people would have to spend this money on things that they ordinarily wouldn’t buy. Unfortunately, I think that most people will simply use the windfall to buy essentials such as food, utilities, and gas. Because they would be buying this stuff anyway, I don’t think that these checks will really be much of an economic stimulus. A lot of people will paying off debt or putting the money into savings. These actions will not stimulate the economy one bit.
It’ll be good for the credit card companies, Big Oil, and China, if people don’t spend it on medical care they otherwise couldn’t afford. So it’s good for the corporations with the final bill being handed to the taxpayer. Yeah, thank George and our feckless Congress for making matters worse (adding to the enormous debt we already have, thanks to George and . . .).
Hi Mark,
“putting the money into savings” ?
very funny.
Now a guaranteed $1200/yr for families that make less than double min wage might stimulate something, but these one-time distributions to everyone are awful.
Putting the money into savings, we’d still be losing money. After all, the national debt has a much higher interest rate than any savings account we could find. We’re losing money from the minute we cash these checks.
The American people are being played for suckers. This is as bad as those Payday Loans.
So why can’t our legislators see this if we can?
Geez Louise, if i was a legislator and heard ANY suggestion from Bush to do something his way about ANYTHING i’d immediately go the other way on it. “The man’s a menace!”
This “stimulus” is like giving a junkie one more fix under the delusion that it will “make him all right.” Which of course it won’t.