Monday, November 17, 2008

Stimulus and the Recession...

How did we get so lazy, me in particular? I have found it perfectly acceptable to pay someone $.99 to clean and iron my shirts. Avg 5 shirts a week; and I can feasibly budget $257.40 (not including tax, and the occasional pants at 1.99 ea.). My only justification is, I found the cheapest dry cleaner in town and I hate ironing.

Am I really that lazy? $257.40 x.075 (city taxes) = $275.70, just in shirts. Honestly, those shirts can adjoin to my existing laundry and I can, conceivably iron them during Sunday football.

So I’m hyper focused on one aspect of my yearly output. If I put the same energy into oil changes, car washes, eating out (wow, that’s probably bigger than I imagine) I’ll bet I can come up with $1k, maybe even more.

Conversely, these are uncertain economical times. If I, as an individual, cut my expenses, that would make little impact on the economy but a significant amount of saving for myself. However, if everyone were to think like this, and a significant amount of the community stopped going to the locally owned dry cleaner, or oil change shop, or car wash. You get the idea. By cutting back we are contributing to the decline. Layoffs and job losses are a direct result of decreased demand for services.

I wonder if anyone ever looked at how much ‘spend’ occurred from the latest stimulus package. With all of the retail chains closing, how much did it really help? How many people pocketed the cash and saved it for a ‘rainy day’? I’m willing to bet the majority of folks used it to pay of existing debt (meaning items purchased some time ago) and it had no affect on the current economy.

I’m not in favor of stimulus checks; I’m not in favor of government handouts of any kind. I don’t think I’m alone. I’ve worked for everything I have, and I am thankful, and donate to charity regularly. This is patriotic.

Now, I’m not saying we should all go dry clean our shirts to help the economy. But I believe we can all agree that a stimulus does nothing if it is not spent. Even then, it is only a temporary boost. Yet, it takes budget away from somewhere. The money does not come from thin air. Therefore, either a government programs get cut (not likely under this administration, in fact we were already told they would grow), or ultimately, our taxes will increase to compensate. (Very likely, though I don’t have all of the details, I thought the way the stimulus was funded was through our taxable income/refunds)

I have never met one person that considers paying taxes enjoyable nor ‘patriotic’. I’d even be willing to say the majority of the folks receiving and using the stimulus checks were paying very little into the tax pool from which they were funded.

What can I do to stimulate the economy? Drive my car, enjoy an overpriced hot beverage, and eat the occasional ’value meal’ from time to time. I can tell you now; I am certainly doing my part. Chick-Fil-A today ;-)

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