This last week, the first checks began hitting the mail as part of Dubya’s economic stimulus passage. Washington can’t wait for this money to hit our pockets so that we can spend like the consuming Americans we are and hopefully turn the struggling economy around. While this is what they would love for us to do, and what most Americans will do, I still don’t think it is the wisest choice.
I’ve written a little bit about this before, but felt it deserved more attention. Millions of Americans are struggling right now, and they absolutely need these rebates to help put food on the table or gas in the tanks. However, the Americans who aren’t feeling the slowdown as bad should seriously give some thought to what they are going to do with their check.
The problem is, contrary to what seems to be a widespread opinion, these rebate checks are not really free money. I’m pretty sure there wasn’t an extra $150 billion budgeted this year for this possibility. It was funded just like a ton of other of our government’s expenditures- by adding it to the debt. What’s another $150 billion or so on top of the $9 trillion tab we already have? Many of this country’s current economic and financial problems originated from our insistence on spending more than we make, and this stimulus package only illustrates this further.
I know that paying off debt or stashing the check away are definitely not the best short-term options for helping the economy, but I don’t think it’s the end of the world. Our economy may be slowing, but that’s a normal aspect of any growing, strong economy. I think we need to worry less about the short-term health and more about the what lies further down the road. I don’t know when or how severe the breaking point will be, but I do know that our current financial ways are unsustainable.
This rebate check can give us the chance to help reverse this trend. By paying off some debt or putting the money away, we are doing ourselves a huge favor down the road. And although Uncle Sam wants us to spend, spend, and spend some more, the long term benefits of using this money to build wealth far outweigh any short term jolt it can provide. Even if it’s only a portion of the check, try to do your future self a favor.
6 users commented in " What Are You Doing With Your Economic Stimulus Check? "
Follow-up comment rss or Leave a TrackbackI actually heard on the radio today that Ralphs will give you an extra 10% if you turn your check into a Ralphs giftcard. I know some other stores are offering similar promotions (sears), but this one might actually be worth doing.
You are going to spend money on groceries anyway right? Why not get a few extra bucks for doing it.
Until you answered my question in the last part, I had no idea what Ralphs was. Never heard of such a place here in Iowa!
I agree with you on this. A 10% bonus on groceries is worthwhile, but a similar bonus spent on clothes or something else that you wouldn’t have boughten anyway still doesn’t make much sense.
Hi Blake - Great post! You have done a good job articulating some of the underlying problems in our economy. I whole heatedly agree with you that most people need to ignore the current spend, spend, spend climate. I have been recommending to my readers that they should be saving and paying down debt. There are enough people out there who are going to spend everything they make no matter what. I say let them! They will help keep the economy afloat! Unless of course they are a close friend, relative or one of our readers!!! To these people, my advice is “ignore the trend, do not spend”! Anyway, good job! Keep up the great work!
You make a good point John. Sure there will be a lot like us who will stash money like away, (or at least not foolishly blow it), but millions will take the ‘hey free money!’ route and blow every dime of it. There’s not getting through to them on their spending habits, but like you said they may help the economy slightly like government intended. We’ll be helping too, but farther down the line when we actually have wealth accumulated and aren’t drowning in our own stupid financial decisions.
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Great post. I think a mix of what people do with the money will probably help.
I will be putting the money in the bank as one of my best use of the IRS Rebate Check. The smart people will save it or pay down debt, the foolish people will buy something from China. Either way, it puts a little confidence back into the economy which is what the Gov. really wants to do. They want you to think it’s not in the toilet.
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