A Second Economic Stimulus Check? Thanks, But No Thanks.
Filed under: Tax Rebate
Photo credit: The Joy Of The MundaneSorry, but I’m not going to fall for the election year pandering this time. I graciously and gratefully accepted the first stimulus check - it paid for my bike and helped pay down my car loan - but we certainly didn’t need it. And now the Democrats are saying the first check didn’t enough to help the economy and they want to start working toward a second stimulus payout. Unfortunately no amount of “stimulus” can help our economy right now because a check will only patch the symptom but won’t help cure the cause.
Americans grew addicted to debt over the last decade. Consumer debt rose to record highs and the nation’s savings rate fell into red. We were lured in with “easy money” from credit cards and unrealistic home equity. We became attached to our ability to buy beyond our means and never built a support structure for the day when it all fell out from under us (and it has).
The first check did some good by allowing the smart consumers to start eliminating the cancerous debt. Although we were encouraged to spend it mindlessly (only perpetuating the disaster of the previous decade), many did the smart thing and used the check as their first step toward financial freedom. But while the educated consumer started helping themselves, the old, decayed economic structure kept crumbling around them.
The pain we’re feeling right now is systemic. It’s not something that can be easily remedied and there’s nothing that average Joe Consumer can do about it. Companies have taken on far more debt than they can possibly handle and the Fannie Mae/Freddie Mac disaster is evidence of that. Together, the two big players in the US mortgage industry have underwritten or own more than $6 trillion worth of mortgages and they’re struggling under the weight of bad debt.
The situation has gotten bad enough that there is little more we can do to “help” ourselves since most of the help we would provide would be to further prop up a failed economic model. As I wrote three months ago, our best hope for salvation at this point would be born of the changes a recession would force upon us. Things are going to get worse (maybe much worse) before they get better and no amount of politically-motivated money thrown at the consumer will fix that unless the powers-that-be start making real changes.
We don’t need the government to borrow from our grandchildren to buy our votes today; we need them to get their act together, work together to come up with a real plan for real changes, and then have the guts to actually put effective change in place instead of pandering to special interest while placating us with meaningless buzzwords. We don’t need them to bail us out of the hole we collectively dug for ourselves; we need them to help us keep this from happening again by helping build a sound economic plan that does more than put short-term fixes on long-term failures. We don’t need the government to save us; we need to save ourselves through smart saving and less consumerism.
So, thank you for the “concern”, O duly elected representatives, but no thank you. We don’t need a Band-Aid; we need radical open heart surgery. Please keep the money we’ve given you so far and, instead, implement the same changes at the government level that your constituents are making at home: spend wisely, cut unnecessary expenses, and prepare for the long haul.
Other takes on the same subject:
July 22nd, 2008 at 11:17 am
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July 24th, 2008 at 10:54 am
It’s very refreshing to hear someone who has such a sober and clear perception of the situation! Thanks. The microcosm= the macrocosm. States were once modelled on families and vice versa. So everyone should control their “own” family’s economy: pay down debt, live within your means, save for the future, and also try to grow your income.
Don’t bother trying anything fancy - like shell games - to try to shift debt from one hand to the other, etc. That’s a large part of the current mess (another large, large part of course was the illegal war - or fiscal theft from US citizens).
July 27th, 2008 at 8:01 am
[...] A Second Economic Stimulus Check? Thanks, But No Thanks at One Caveman’s Financial Journey — I wrote about the idea of a second stimulus check earlier this week. Here’s another article that supports my point of view. [...]
August 21st, 2008 at 7:02 am
[...] A second check? Thanks but no thanks @ thatonecaveman.com [...]