I have been observing our current economic situation and as a result, haven’t been updating the site as I normally would. Thank you to Kim for holding it down – she proves over and over again why she is a keeper!

Stimulus Check Part 2?

How do we go about stimulating the economy when the experts are saying things are going to get (much) worse before they get better? If President Obama makes way for us to get another stimulus check, will that really be enough? I don’t think so.

I’ve read a lot on the Internet about what people would do with a stimulus check and the majority seemed to say they would use it to pay bills (i.e.  credit card debt, etc.).  It’s unfortunate that paying off credit card debt would only help credit card companies and banks.  Didn’t the financial institutions already get $350 billion? I know I’m over simplifying things – done on purpose – but it seems like the end result would be putting the money in the hands of the same people who have already received bailout money.  Other people said they would go out and spend the money because that is what would really jump-start the economy and that is what the money was meant for. This seems to make more sense to me, but there could be a wrinkle to this. What if people purchased items made outside of the U.S. (i.e. Japan, China, India, etc.)?  What type of effect would that have on our economy?   Finally, some people said they would save the money. I really don’t see how this could help the economy since the money would just sit and probably not gain very much interest.   Just so you know, this topic is not my area of expertise, so I welcome any and all corrections.

I wonder if fear is a major role in our current economic situation?  I read that layoffs in Alabama caused others to essentially shut down purchasing because they were fearful of being laid off themselves. If individuals stop spending because they are afraid, the situation may actually get worse.

Finding the Perfect Balance

There is a fine line between spending less due to the economy and spending enough to help the economy rebound. This would apply to everything from candy bars to houses. If we spend on only the necessities, we may allow businesses to do more with less or less with less. Yes, we should be smarter about how we spend our money, but the bottom line is — we need to spend if we expect the economy to come back.

Our government could help by forcing some industries to reasonably price their products. For instance, how about if the oil companies made profits ($ billions), but not record profits? What if places like Washington, DC didn’t have townhouses starting in the “Low $1 millions?” Do you know any construction workers or mid-level employees who are making a lot more money as a result of the high prices we paid over the last five years or so?

Relief, or an end to price gauging, in some key areas would allow us to start spending in areas that need it more. I know we live in a society where there’s no limit as to how much a person can earn, but maybe striking a balance between reasonable prices and profit make more sense for the long haul. Maybe some of those people should play SimCity to realize the benefits of making less money over the long haul instead of draining the well dry right now.

On a side note, when one of the oil company CEOs retired a while ago, part of his retirement package – worth $400 million – was a security detail.  Hmm, now why would he need security?