Sunday, January 27, 2008

Editorial: Will we be stimulated?


This whole economic stimulus package has everyone wondering... will it really help?

Personally, I'm leery. I just don't believe the return of investment will be worth the expense. Or put more simply... I don't believe it will work.

I mean think about it, the reason the government wants to issue checks to everyone in the first place is because the economy is in the toilet, and the economy is in the toilet because the cost of living is going up and wages are not. For example, the costs of heating our homes, filling our gas tanks and paying our medical premiums have risen significantly over the last decade, yet salaries have not gone up to match this inflation at anywhere close to the same rate. Therefore, if our expenses are rising and our income is not - it only stands to reason that we need more money... to pay bills!

And that's what has me concerned about this economic stimulus package.

The entire logic for issuing $600 checks is based on the assumption that every person who receives one will run out to Sam's Club and buy a big screen TV, which will somehow magically "stimulate" a chain of events that will generate more manufacturing which will lower unemployment which will create more job demand which will increase our wages which will cause us to spend more money - and on and on.

Unfortunately, there's several flaws in this logic - and one important one is exactly what I mentioned earlier. Right now most of us are simply going to use our rebate checks to pay bills. Like I said, if the economy is in the toilet, then people are behind on credit card, utilities and doctor bills - and most people will choose to pay them down before they run out and buy something frivolous just because they were handed a few extra dollars.

Another major flaw is that there is no way for the government to control whether or not we spend this money on items manufactured in the United States, which defeats the purpose if everyone is giving their $600 to China - the country that is most likely going to end up being the one to finance the source of the $150 billion in the first place.

So after having said all that, I am extremely curious as to what you, a microcosm of the larger economy, will do with your money. Therefore, I have created a simple poll you can click on anonymously to indicate what you plan to do with it. Or, you can just go ahead and tell me about it in the comments, either way is fine.


How will you spend your rebate check?
Pay bills
Buy something
Take a vacation
Donate it to Jeff
Other - explain in comments
pollcode.com free polls

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Now then, on a completely unrelated side note...

It appears I've started to spread... like some kind of blog virus or something.

On Monday I will be appearing at two different websites. Two, count em - TWO!

Over at Central Snark you can learn how I was first inspired as a young boy by two cute guys named Dave. Don't worry, it's not as sick as it sounds.

And, I am also the subject of a very odd interesting interview over at Angry Seafood.

So please, stop by and give me some lovin over at these awesome websites, because I need to know you love me no matter where I am. Plus, I'd hate to let them down after everything they've done for me.

But more importantly, I'd hate to find out what happens if I make seafood angry!


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Use your rebate check to buy some laughs at Humor-Blogs.com!

37 comments:

Anonymous said...

rick says...
We must remember that our government is actually 9 trillion dollars in the red. That means they are actually giving away money that doesn't exist, basically bribing people for votes by printing phony money. I would recommend buying practical things like tools just in case the big house of cards finally implodes.

Windyridge said...

Exactly. The money goes to oil or whatever bills are out there. It's a joke. And yep China will probably make out like bandits for those that decide to actually spend the money on something other than bills. Another joke. But the jokes on us.(sad)

DrowseyMonkey said...

since i'm canadian and won't be getting a rebate...i can't vote. but if i could...i'd give it to you.

not really, I'd use it for tim horton's coffee.

Whit said...

We'll probably be the people that buy something. We have tons of bills and are barely making ends meet, yet the money sent isn't enough to make a noticeable dent in any of it, so we may buy the few things that we've been wishing for.

Groovy Mom said...

I also doubt the rebate checks will stimulate the economy. It's a political trick. "Look, we did SOMETHING. Aren't we great, people?"

That said, we'll probably spend our check on home improvement. Yee-haw!

TZT said...

I agree with you - I have no idea what this whole thing is supposed to accomplish, and I'd really rather just have reasonable health care costs than some bonus meant to tempt me to buy a widescreen TV.

Mamma said...

It didn't work last time Bush tried this did it? Remember not that long ago when we had a surplus budget??

It makes me sick.

Anonymous said...

If everyone donates their check to the Saint Cloud skate park, it would help both the economy and the children.-Bill

Zoe's Dad said...

I can see how it's going to play out now...I get the check--I'm gonna spend that sucker. Unfortunately, most of the things on my wish list are more than $600 so in my twisted way of thinking I figure I've got almost all of it so I buy anyway and put myself even further into the hole. Thanks for the leg up, George.

Speedcat Hollydale said...

Who gives a rat's behind ... I need it, I'll take it. Minnesota Dems are bleeding me to death. Single working guys are slaughtered in our tax structure - sure, that's fair...

St. Cloud aye?? You live by the golf course?

Hello from Speedy - I saw you driving by!

Jeff said...

rick - I know, scary isn't it. You gotta wonder how deep in debt a country can go before it's too much. There's gotta be a limit.

windyridge - You're right, it's very sad.

drowsey - Ooh, I've heard a lot about TH's coffee. We're going up to Winnipeg this summer. I'll make sure we stop and get some!

whit - If you can't lick em eh?

groovy mom - That sounds like a good use for it, and if you give it all to the home center then you can help "stimulate the economy"!

tzt - Exactly.

mamma - Yeah, that was in 2003. We can see how well that worked out eh?

bill - Thanks dad... forever the advocate of your grandson's work.

zoe's dad - Well, it seems to me that's exactly what he's hoping for.

speedat - Actually I have customers down by Hamel so you may have seen me driving by. But I've never been to Hollydale Golf Club, although from the web site it looks might nice!

Chase said...

Exactly. People who will go out and spend the money will go to places like WalMart, places that DON'T stimulate the economy. China will take over one of these days...they're just sitting back and waiting for us to bend over far enough. We're bending pretty damn far as it is.

Chris C said...

Grrr I'm angry! Not really but the interview is up and it is another fine one in the growing series. :)

On-topic: I'm torn because while it is my money they are giving me back this is a bad idea overall.

Mooselet said...

I won't be seeing any of this vaunted cash, at least I assume we won't despite us being forced to file US taxes every year without a US income, so I can't spend it. I can't see how they can give people money they don't have in the first place. Go try it with your utility providers and see how far you get! As I said on another blog, this is retail therapy the country can't afford.

neva said...

oh man... i wish i had time to A) take this "poll" and/or B) read your "interview" on AngrySeafood. that said, i'll be back later to do both!!

naturally, i DID read your post on The Snark, and found it to be a lilting and laughable trip down your personal musical memory lane! : )

PG said...

Hell, I am not going to refuse the check. What with the two of us and four kids should be 2400.00.
It will help us out and while we are not going to go blow it all on a big ticket American made item sold by an American owned store it will help us financially.
And it provide us an opportunity to spend more elsewhere somewhere down the line. Not a panacea, but a few more drops in my bucket.

Mom Thumb said...

I will put Neosporin on it and use it to soothe the wounds caused by the devastation of the mutual funds in my IRA.

Jeff said...

chase - Hmmm, maybe I'm wrong, but I have a feel Freud would have something to say about your comment.

chris - I'm with you. Obviously I enjoy getting free money as much as the next guy, but if I had anything to say about it I wouldn't have voted for it. BTW, thanks for doing my interview. That was TONS of fun!

mooselet - You're absolutely right. It's not the US' money to spend in the first place. And now you've got me curious.... why do you have to file taxes in Australia?

neva - Cool, I've never made anyone lilt before!

pg - Hey I'm with you. We'll probably get $2100 with our 3 kids. I'm not saying I won't spend it, I just don't think it's going to do what they think it's going to do.

mom thumb - Good plan. My 401k is shrinking on a daily basis too. Man, I hate shrinkage!

VE said...

I hope all this fame at other blogs doesn't go to your head...

Jeff said...

ve - Don't worry, I won't get a big head... until Oprah calls that is, cause you know, I hear she's always looking for midwestern daddy bloggers to put on the payroll.

Mooselet said...

We file taxes because all US citizens are required to do so every year, whether or not you've earned any US income. So the Hermit's paycheck, despite being earned outside the US in an Australian company, is taxed by Uncle Sam. The US is the only country that does this, to my knowledge.

If I were getting any funds, I'd probably put it towards bills.

Rickey Henderson said...

Rickey's spending his refund on pornography and intoxicants. So yes, in the literal sense of the word, Rickey will be stimulated. Engorged even.

Marie said...

I completely agree with you. I remember being really excited with my rebate check in 2000 or so, but I'm older and wiser now. I hope this doesn't go through. What we need is not spending money, it's debt relief. We need them to fix things from their end. Giving us cash is like giving a fat kid a candy bar.

Jeff said...

mooselet - Well that's just plain weird. Leave it to the US. I guess when you're broke you gotta get your money wherever you can.

rickey - Well then, good luck with all that.

marie - Maybe they should just give out candy bars instead. It would be a hell of a lot cheaper AND accomplish the same thing.

Shieldmaiden96 said...

I have 'Irish luck', which basically means that within days of the receipt of this check, something will go wrong with my car that costs the amount of the check plus or minus about $14. So its very likely my check should just be cut to my mechanic.

Jeff said...

shieldmaiden96 - Hah, that's great! So that's what they mean by the "luck of the Irish" huh?

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Now then, I must add... I'm VERY disappointed in all of you. 21 votes in the poll so far and not ONE of you has chosen to donate it to me. Some friends you are.

Emma said...

Make that three websites! Come get your prize, MULLET MAN!!

Elizabeth said...

Ours will go right into the adoption fund which will eventually end up going to China. So it will stimulate someone's economy, but not ours.

Anonymous said...

Banks all over the world slumped on MLK Monday. American banks opened downward Tuesday, but the President stopped the slide with an interest cut. He remembered how his father was critized for being too late with his tax cut.
The current market problem began in France. A bank retrieved 7.3 billion in stocks and quickly dumped them on a market already in decline. This triggered an automatic sell order to machines around the world. Machines programed to sell can start an avalance, and no one has addressed that problem.-Bill

Jeff said...

emma - Oh geez, could I be any luckier! And to think this is the one week I didn't buy a lottery ticket. D'oh!

elizabeth - I sure wish they could speed that process up for you. Until I started reading your blog I had NO idea how slow and painful the trip actually is. Good luck with your adoption and I'm always checking on you and hoping your day will come soon.

bill - The stock market is nothing but a bunch of superstitious people trying to second guess the future based on misinformation of today. But one thing's for sure, it wasn't an automated machine that threw our economy into a tailspin or an interest cut that saved it. This recession has been building for a decade and is based on the fact that greedy gigantic companies are in bed with the crooked politicians who make the spending decisions.

Um, I mean good point.

Chris C said...

Every stimulus package passed in the past was too late. The problem is not the timing it is that this isn't a viable solution.

The crux of the economic issue is that we have not learned to ensure practical loan/credit issuing during times of expansion.

We always have lax lending rules during times of expansion which is really stupid.

Hell, we still have it going on. All this talk about how to help people in trouble but yet payday loans are legal.

Carla said...

It makes my head hurt...this so called 'stimulation package', It's like cutting off the end of a blanket to sew it on the other end to make it longer.

Jennine said...

Wow. A married couple with seven kids... I should be getting a check for like a bazillion dollars or something.

I'm pretty sure I will paint my living room in a pretty red, white and blue pattern.

Don't tell Darren I said that.

Jeff said...

chris c - For sure. And that is just one of a several things that have contributed to our mess of an economy.

carla - Good one.

jennine - Someone told me last night that they heard it was going to be capped at 2 or 3 kids, but now I just heard on the radio that there's 2 different versions of this thing on the floor, so who knows how it will end up. I'd still like to see your R,W & B living room though!

croyus said...

I will use my rebate check to pay my federal taxes which seem to go up every year.

The Holmes said...

I'm also extremely skeptical about this idea's ability to make any meaningful change in the country's economic situation. I think our problems run a lot deeper and are not going to be solved by these kinds of unimaginative quick fixes that our government seems to be so fond of. That being said, if things go as planned, we'll be using ours towards the purchase of a new house, so I'm, uh, all for it. Hehe.

wayabetty said...

I'm donating half to Jeff and the other half to buy diapers. Now Jeff, will you forget the little people like myself on your way to stardom?