Thursday, February 07, 2008

Great Finance Article

I will include a small portion of it here, but click the link to to read this article which pretty much hits the nail on the head regarding our much heralded Economic Stimulus Plan.

Just Call Me Unpatriotic
February 7, 2008
By Jennifer Derrick

If you haven’t heard, the government is devising an “economic stimulus package” to jump start the economy. While the details aren’t yet final, it appears that the majority of American workers and retirees will be getting some rebate money from Uncle Sam. The latest figures to be tossed around are $1,000 per couple, $500 per individual and $300 per child.

I am not excited about receiving my rebate check. Why? Why wouldn’t anyone be excited about free money? First of all, I’m very aware that this is not “free” money. Uncle Sam is going to want it back at some point. It’s unclear at this time whether or not we’ll be expected to report this on next year’s taxes as “income,” increasing the amount we’ll owe. If Uncle Sam doesn’t collect next year, at some point taxes will have to increase to repay this stimulus plan. You don’t just hand out $193 billion (especially when the country’s debt load is already in the trillions) and not expect that back at some point. At some point, the budget will have to be balanced and you can bet that the government is going to come looking for that “free” money they gave you.

Second, I don’t like the attitude that comes with this rebate. The government is urging us to spend the money as soon as it lands in our mailboxes. You’re downright unpatriotic if you don’t spend it. You’re not doing your part, they claim. Do your part, spend the check and save the economy. Not one word has been uttered about saving it or using it to pay down debt. All I’ve heard is that we should all go out and make a purchase that we would not have otherwise made. Um, just thinking out loud here, but isn’t spending everything we make, as soon as (or before) we make it, part of what got the economy into this mess in the first place? Wouldn’t it be wiser for the government to advocate that citizens take some of that money and reduce their debt or save it to ensure their futures? These actions help the economy too, although more in the long term than in the short term, which is all that politicians in an election year care about. These politicians want to, by November, be able to claim that they saved the economy by passing this rebate plan. That can only happen if we spend the money. If we save it or pay down debt, some politician ten years from now might be able to say that the economy is better off thanks to the rebate plan of 2008, but who will care then?

Continue reading at