Wednesday, April 30, 2008

Economic Stimulus Checks

As our country is possibly heading into a recession (it hasn't happened yet, you need two consecutive quarters of negative GDP growth for a recession), our government is sending us a gift, specifically about $600/person. Where did that money come from? Mostly from the wealthy people who "don't pay taxes". I digress on that point, as I am a middle class citizen who is fully aware of how much tax is paid by the top 1 % of citizens, but I am focusing on what the $600/person means to our country.

You no doubt may be tempted to save that money or pay down debt. 99.9% of the time, this is a very smart move, and in this case, certainly not a bad move. The reason you should rethink this strategy is because this money is meant to be economic stimulus. Spending the gift is the smartest thing to do because this will help your local economy generate revenues, which can generate or maintain jobs, generating more tax revenue that could ultimately help your community. Politics aside, think hard about what you will do with the check. If you are otherwise in a good financial situation with a savings account, some retirement savings, and a manageable debt load, spend the money. Maybe a vacation, a new grill for summer, or take my wife's lead and buy some clothes. You will enjoy the small splurge, and millions of dollars pumped in to the economy will help everyone.

1 comment:

Anonymous said...

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