Free Money!

At the urging of the Federal Reserve Board Chairman and others, the Bush Administration has pushed an "economic stimulus" plan to avoid a supposed recession. From the outset, I was very curious as to how exactly you do something like that. The answer, apparently, is free money. If you qualify - and something like 116 million Americans do - you'll possibly be getting a tax rebate check in the mail. This may come as early as May or June. $600 for individuals, $1200 for couples (filing jointly) + $300 per dependent child. Congress seems to be following along with this plan, though we know how that goes.

This proposed plan, including all of the other rebates that would benefit businesses, is purported to cost the government somewhere in the neighborhood of $150 billion. Its well known that our federal government is not operating in the black. So our nation goes deeper into debt to stimulate our nation's economy? Republican Presidential Candidate Mike Huckabee is skeptical of the whole thing, and I think he's right. Our government will likely borrow the money from a foreign country to give it to Americans, who will likely blow it on products made in foreign countries. So who's economy are we stimulating?

I'll add that if you aren't already living on a budget, if you don't have a spending plan for your money, then you can kiss this money goodbye. You'll have it spent faster than you can say, "Who ran up the Visa bill?". You won't use it to pay down debt (which you should). You won't save it for a rainy day (at least not for more than a couple months). A year from now, you won't even be able to point to something and say, "That's what we did with it, that's how it help our family". If you're not already, then it's time to get on a real plan. Its time to get out of the clutches of debt. This free money from the government may be just the thing to get your debt snowball started.

Full Disclosure: If this check from Uncle Sam comes in ( big IF), ours will got straight into our savings till we apply it to our Irregular Income Spending Plan.

***Update 2/15/2008 *** The checks ARE coming. Does this change our position? No. Read what Dave Ramsey has to say about the 'stimulus package' here.


Anonymous said...

I agree 100%!!!!!!!!!

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