Not that I'm complaining if I happen to get a rebate check, but I don't quite understand how this new economic stimulus package is good for the United States in the long run. It seems like the economy is in a rut because too many people are living on credit and spending money they don't have. So the answer is for the government to essentially give us money they don't have? Shouldn't everyone be paying down their debt? It's not like I would take my $600 to pay off my credit cards. Why do that when I've got all this "free" money to buy an iPhone?
All this seems to do is perpetuate a sense of calm in this country that all this credit debt is OK and a little shopping therapy will do you good.
1 comment:
Here is how the capitalist economist sees it (I think). The US economy is in trouble. (Predominantly from defaulted home loans and soon to be credit cards and everything else.) The primary force in this economy is the consumer - making up 2/3rds of the GDP. While it doesn't necessarily help the problem with home loans initially, it drives big business for people to go out and spend their money on an iPhone or whatever else. Plus it makes you think that your politicians are really out for your best interest when they send you a check in the mail.
What would be nice is if the government would help people pay off some of their debts - particularly real estate debts. I would love it if we didn't necessarily get tax breaks on interest from your mortgage payments but you got tax breaks on what you pay towards your principle. $150 billion could go a long way in helping people pay down their home loans and keep them out of trouble. Plus the banks would also get what they want. Alas, there is probably something that an economist would argue is fundamentally wrong with the government stepping in to help the individual. And I also like what Reagan had to say ... The government exists to protect its citizens from each other. If the governement steps in to help the citizen protect from his or her ownself then it has gone too far. I think my idea about the government helping everyone to pay down their debt is the government stepping in to protect each citizen from himself,so I have to side with giving me the money so I can spend it how I wish. I think I will apply mine towards my principle.
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