On Saturday morning’s Fox and Friends show (11/8/08), former Governor Mike Huckabee made the statement that an economic stimulus package doesn’t help the American economy — he gave an example of the last round of $600.00 checks that were sent out and stated that ‘the only economy that was stimulated was China’s’. He’s partially right but, in a large part wrong.
True that we essentially borrowed the money from China to finance the stimulus and true we’ll be paying it back with interest but his assertion that our (consumer) use of the money only benefited China was pretty far off.
Money Not Spent Wisely Is Still Money Spent
What should have happened when taxpayers received their money was quite different from what did happen.
People had planned to use their money wisely: to pay off past-due bills, catch up with their rent, save some, get ahead on car or mortgage payments, buy some things they needed (or just wanted) that they couldn’t afford before, tuck a few bucks away in savings accounts as a reserve toward emergencies, help out friends or family members who needed it, donate some to charities, and the list goes on.
What actually happened was a bit different: People went on a consumer binge; they bought new “toys,” i.e., computers and appliances that weren’t really needed but wanted, money was spent on restaurant meals, movies, cosmetics, new clothes, jewelry, books and actual ‘toys’ for their kids, and etc.
The point is, money not spent wisely is still money spent; money spent in department stores, electronics stores, book stores, movie theatres, toy stores and restaurants did exactly what it was supposed to do, it stimulated local economies. But it did more than that, it made people happy and even optimistic.
Benefit to China?
Getting back to my original contention: it is the American taxpayer and American business who benefited. Lets say that half of the money spent by consumers from those stimulus checks went to purchase items made in China — those items were long since paid for by American businesses and were marked up for a profit to American businesses — there was no real stimulus for China when they were purchased and a great stimulus for American business.
A Minority of One?
I am admittedly in the minority! If you search the news or the blogs (starting with the links at the end of this post) for “stimulus checks” you will see a lot of negativity. This is, however, my POV and it makes sense to me.
Americans Can Be Pretty Gullible
The issue of how money is spent goes far beyond economic stimulus checks. Americans are continually assaulted by “no money down” offers, get rich quick schemes, no payment until whenever offers, and, well, you know what’s out there. More than schemes to just get your money these are things that take advantage of your hopes and dreams.
Sure, we’d all love to live in a big house with the most modern appliances and fanciest electronics and drive our dream cars — and we can! . . . but the problem is, the bill will eventually come due and you had better be in a position to pay that bill when it comes due or your dreams will come crashing down all around you. Many people, as we see in this current “mortgage crisis,” fell for the sales pitches made by unscrupulous mortgage lenders, real-estate agents and salesmen who didn’t give a damn about the ability of the customer to meet his or her obligations as long as they could turn in the paper work that showed that they “made a sale.” There ought’a be a law that puts these people in jail long enough for them to realize the errors of their ways.
Then there are the offers to “make thousands of dollars a month” over the Internet, even on a part time basis, with no special training, etc., etc.. How many millions of dollars have been wasted by gullible consumers getting in on “the ground floor” of these schemes only to realize that, in many cases, the only business is to find new suckers who are willing to pay for this fantastic opportunity. It’s an old saying and has been used to the point of becoming trite but there is no truer axiom than: “If It Looks Too Good To Be True, It Probably Is!”
Hey! I’m not putting anyone down for being gullible any more than I’m putting myself down. I’ve fallen for more stupid schemes in my life than I can count — or care to remember. We all want to get rich, we all hope for that big Lottery win or that chance to get “discovered” or to somehow “fall into a pot of money”. But until we actually have the ‘new’ money in our pockets, we have to take real good care of the money we DO have!
Dallas Morning News: Only 39% say they would shop for holidays with stimulus check
Convenience Store News: Government Checks Won’t Stimulate Consumers
Profitable: Stimulus For the Economy-Check Or Is It Checks?
In Defense of Liberty: And So It Begins, But Where Will It End?