Economic “stimulus”

Here’s an interesting article that kind of sums up how I feel about the economic “stimulus” handout that the government is planning.  I’m all for getting free cash from the government, friends, pretty much anyone, but I really think it’s a short sighted use of money that won’t have a real impact on the problems that are occurring in our economy.

Why The U.S. Economic Stimulus Plan Won’t Have Much Effect

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  • Reply Dale January 25, 2008 at 7:16 pm

    I’m not an economist, and I’m not really sure what the answer is to stimulate the economy, but here are my thoughts up for debate:
    If we take our rebate checks and spend it on products from China, can we all win? Why are products manufactured in China anyway? Probably because they’re cheaper. So that means it’s cheaper for us, which means we can buy more stuff. The Chinese company makes money too, giving them more to spend. They can then spend it on Chinese products, or maybe his kids can buy a Kobe Bryant jersey. The money then comes back to us.
    One person said that a trade deficit isn’t necessarily bad. His example was that he has a huge trade deficit with his mechanic. He’s paid him a lot, but the mechanic hasn’t bought any of his books. So should be stop going to him and fixing his car himself? No, because it would take him forever to fix his own car and probably wouldn’t be able to do it right.
    I’m also all for helping the environment, but buying a hybrid might could actually hurt the environment. If a hybrid costs more than it saves in gas, that means the technology isn’t to the point yet where it’s more efficient. If it’s not more efficient, then it could mean that resources (energy?) are better spent making normal cars. Another example is I hafta pay an extra $4 a quarter for recycling service. The fact I hafta pay more for recycling probably means that the additional gas that the recycling trucks burn to come by and pick up my recyclables doesn’t pay out in the savings I get from not landfilling.
    Again those are my thoughts, I’d be happy to hear alternate views because I’m not an economist!

  • Reply MT January 26, 2008 at 4:20 pm

    The problem is that the Kobe Bryant jersey is probably made in China, so the money made by a Chinese company again. I think the big issue is that the U.S. doesn’t make that many things any more. All the great U.S. brands are made overseas so if you buy more Apple things, Nike things, they’re all made in China. The money is just flowing out of the country.
    I think we need to invest in the next generation of manufacturing, things related to energy. With that we can reduce our dependence on Middle East oil and begin producing things that the world might want to buy from us.

  • Reply ginger January 26, 2008 at 9:36 pm

    Well, I know that this working girl is all about the tax rebate and ours is going towards a vacation – so essentially we ARE putting money back into the economy in the United States.
    I’m a bit confused by your post. I have to say, I agree with Dale to an extent. Does the product you distribute not come from an overseas manufacturer? It’s all about profit margins.
    The problem with the US, unemployment, etc., is that we have a nation full of lazy people waiting for handouts. Generations of people who have lived on welfare and continue to do so. I’m all for helping those who NEED it, but the best place to find a helping hand is at the end of your arm.
    While I’m at it, I’m sick of my kids and my family being turned down for things as simple as preschool because we try to live with integrity and work for everything we have. Because my husband and I are married, our daughter can’t go to preschool in the county because it’s “for kids that don’t have anything”. Oh – so punish MY kid because we did what we were supposed to do. Our other option is to pay $200/week for preschool. Well, let’s see – that’s 1/2 of our mortgage, so if I were to put my daughter in preschool I’d become one of those statistical families with a house in foreclosure. Screw me – the working (wo)man.
    I can’t even get into all of this politics because it just pisses me off. All I can say is that I’m grateful for the rebate.

  • Reply MT January 27, 2008 at 1:34 pm

    All I’m saying is that this tax rebate is not an effective tool for stimulating the economy. My product as an example IS made in Taiwan so if someone spends $100 with me nearly half of it is leaving the country. It’s like that for most products that you would find in Walmart. So, if you’re giving people money to spend, who’s economy are you really stimulating? U.S. manufacturing has been devastated to the point that there are certain category of products that you would have difficulty finding a manufacturer for. Do I feel bad about it? Yes and I’m actually trying to find a U.S. Manufacturer for at least some of my products.
    On the other hand if you spend the rebate money on food or infrastructure, nearly all the money stays in the U.S. Economy.
    The solution that government has is not trying to solve our economic problems, but to give it a quick fix. Like giving a crack addict who’s suffering withdrawals another quick hit. It feels good in the short run, but doesn’t solve the fundamental problems of the economy.
    Really, people should use the money to pay down debt or save it, but that’s not what the government wants.

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