Early this year, it was decided by the President and Congress that we needed to send out free money to American taxpayers. From the IRS website, you can now find this post on the economic stimulus checks of May, 2008.
Economic Stimulus Payments Information Center
Updated March 10, 2008Starting in May, the Treasury will begin sending economic stimulus payments to more than 130 million households. To receive a payment, taxpayers must have a valid Social Security number, $3,000 of income and file a 2007 federal tax return. IRS will take care of the rest. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. Millions of retirees, disabled veterans and low-wage workers who usually are exempt from filing a tax return must do so this year in order to receive a stimulus payment.But there are more details to know about. Find out more here and visit this page regularly for the latest updates.
In 2008, we had a sad day in America. That day was when a professed conservative, Republican president decided to send out 168 billion dollars to Americans across the country. This has to be one of the largest welfare efforts ever in United States history. The move was unconstitutional, and anyone who thinks it wasn’t clearly doesn’t understand the U.S. Constitution or the role of government. The economic stimulus checks received by 130 million households amounting to about 168 billion dollars don’t reflect conservative values. Most of all, they don’t represent hard-working American values.
Let’s set aside all the arguments about how hard Americans are struggling right now. I know all of these very well. I have two teens in high school – they eat, want computers and cars, and more. I have a car that’s 10 years old – I don’t buy a new one, because I can’t afford it. It’s easy to go to a grocery store, buy $100.00 worth of groceries and walk out with 2 or 3 bags. It now takes sixty dollars to fill my car up with gas. When I first bought the car it was less than twenty. I feel the pain, and I am both sympathetic and empathetic.
The real problem with the economic stimulus checks is that it wasn’t an economic stimulus at all. At best, this money only served to placate Americans in hopes we won’t notice just how bad things really are in this country. The bad news is, it didn’t help. It didn’t stimulate the economy, and here’s why.
You really have to understand economics and economic theories to get the full picture. It goes back to supply and demand and production and consumption. Our president and his advisors were looking at the elevator (think of the elevator as the economy) with two buttons – one representing up and the other down. To really get this picture, you have to understand that two pulleys called supply and demand drive this elevator called the economy. Current economic theories that are heavily driven by and ingrained with capitalism and industrialism ideals suggest that to stimulate the economy, you must increase demand for commodities. Thus, the President’s thinking that $600-$1200 dollars would be enough for the average American to purchase a new HDTV, a new computer, etc. He, along with our Congress, pushed the button they thought would cause the demand pulley to take the elevator up. He pushed the wrong button.
For demand to truly rise in the marketplace, it assumes consumption. In order for consumption to occur, there must be consumers with disposable income. A disposable income can only come from a job that supports a middle class lifestyle, where that lifestyle can be supported beyond the basic necessities of life – namely food, clothing, and shelter. Such jobs are much more scarce these days. For those fortunate ones with a middle class income, when inflation is added to the equation the basic necessities simply cost more and take a greater portion of disposable income. Bottom-line, the economic stimulus checks didn’t drive demand up, it didn’t create new jobs, it didn’t do anything. The healthiness of the American economy is not measured by consumption – it’s measured by production.
The President should’ve pushed the other button – the one that increases supply. The supply pulley drives production – it’s the productivity of an economy that’s the true wealth of a nation. Production requires labor, which in turn results in new jobs and income, of course. For example, if that same 168 billion dollars had been used to fund the creation of new jobs at an above average income of $50,000 per year that would’ve created a total of 3,360,000 new jobs. Additionally, new industries and new commodities could’ve have been created for export internationally and consumption locally. Creating commodities for export also would have helped to keep inflation in check. In the final analysis, this approach would’ve been much more helpful in creating and sustaining a thriving U.S. economy.
Please push the other button next time Mr. President. We need dignity and jobs, not handouts and big screen TVs.
America's economy needs to be jump started. This isn't the way to do it.