Our Federal Reserve chief, Ben Bernanke, testified on what vehicles he thinks could help the weak economy improve. He already has the support of the Congress and the Bush Administration to implement some sort of short term economical stimulus. He made it clear that if we use this vehicle of stimulus, it must be implemented very quickly. If we were to have the effects of a stimulus like the one proposed in a growing economy, it can hurt it. Therefore, it must be put in affect quickly. Well, let’s look at how this can really play out. The stimulus plan is to rebate back, through taxes or other avenues, 150 billion dollars to the consumers. The feds want to give us money to spend it basically. I will do the math for you in a minute. It is not a guarantee fix though. All the big dogs (Merrill Lynch, CitiGroup, Time Warner, Walt Disney, Viacom, and CBS just to name a few) are all reporting losses and say that we are in a recession. Bernanke though will never say recession unless we are in one. So if they were to expedite the stimulus plan, we can see it as early as the end of this month. Now, how much money will that put in your pocket and what do they want you to spend it on? There are about 300,000,000 people in the US according to the Gov. Census: http://www.census.gov/population/www/popclockus.html. $150,000,000,000/300,000,000 = $500eachWe have a 13-14 trillion dollar economy! Will this stimulus really work? 150,000,000,000/13,000,000,000,000 = 0.0115384615 That is an effect of right over 1% of our economy. Regardless, the Fed still believes that this will help. I suppose something is better than nothing. I suppose we could just let the market take its course though too. Well, what will you use your $500+ for? That’s what I want to know. The Feds want us to put it back into economy. That is, “in things that are domestically produced.” (Bernanke) Those things will help improve our economy. What will you really spend your rebate on though?
TRM talkrealmoney.com
I would love to put it back into the economy. I’m sure most people will spend it on frivolous things but I am one who believes in putting money back into our local economy. I like to try and shop locally, (when possible) and when it’s not, oh well. I’m not really sure about this stimulus, sounds a little odd to me. I don’t really see how it will “help” so to speak.
This “injection of cash” mean FED (which is a private bank by the way) is printing more money yet again.
The dollar free-fall will accelerate. Gold will continue to sky-rocket. This short term fix is going to create huge problems down the road.
At the end of the day everything will get very expensive – it already is happening. Problem is most people are still brainwashed by main-stream media and government and believe the inflation is 3%.
The whole system is rigged though. So I guess its all good. Its not a market but a road-map.
Here is a great video on that:
http://video.google.com/videoplay?docid=-1656880303867390173
I see good logic behind trying to stimulate the economy but I don’t believe we are in a recession. Maybe these companies are trying to boost their own profits without having to work harder to earn them. What if losses were due to poor marketing? I think most Americans are in some kind of debt and I personally would spend most of the money paying some of mine off.
I would pay off my debt as soon as I got my hands on any kind of money (yen, pound, euro)
I owe the government for the 2006 tax year (a heck of a lot more than $500). What about people like me? Do they give it to me? Do they apply it toward my debt? Do I get nothing at all because I was “delinquent”?
Jeannine, I got a chance to talk to my tax guy and he said that if there was a rebate to go out, it would most likely be credited to your debt. So, you might get something but you will not physically see it.
It almost seems as if the White House is saying, “the Hell with it, just let them decide!”. They think Americans can make the better choice? Do any of us really believe that the common American knows the slightest about our current declining economy? Apparently the government doesn’t either…
Titus
Titus,
The Gov. wants to give people money to spend it… They know that lower and middle class people will spend everything they get. That is why the Govt. is giving this rebate to almost everyone… even people that don’t pay taxes! Its all about market activity.
talkrealmoney.com