If you haven’t heard, the government is devising an “economic stimulus package” to jump start the economy. While the details aren’t yet final, it appears that the majority of American workers and retirees will be getting some rebate money from Uncle Sam. The latest figures to be tossed around are $1,000 per couple, $500 per individual and $300 per child.
I am not excited about receiving my rebate check. Why? Why wouldn’t anyone be excited about free money? First of all, I’m very aware that this is not “free” money. Uncle Sam is going to want it back at some point. It’s unclear at this time whether or not we’ll be expected to report this on next year’s taxes as “income,” increasing the amount we’ll owe. If Uncle Sam doesn’t collect next year, at some point taxes will have to increase to repay this stimulus plan. You don’t just hand out $193 billion (especially when the country’s debt load is already in the trillions) and not expect that back at some point. At some point, the budget will have to be balanced and you can bet that the government is going to come looking for that “free” money they gave you.
Second, I don’t like the attitude that comes with this rebate. The government is urging us to spend the money as soon as it lands in our mailboxes. You’re downright unpatriotic if you don’t spend it. You’re not doing your part, they claim. Do your part, spend the check and save the economy. Not one word has been uttered about saving it or using it to pay down debt. All I’ve heard is that we should all go out and make a purchase that we would not have otherwise made. Um, just thinking out loud here, but isn’t spending everything we make, as soon as (or before) we make it, part of what got the economy into this mess in the first place? Wouldn’t it be wiser for the government to advocate that citizens take some of that money and reduce their debt or save it to ensure their futures? These actions help the economy too, although more in the long term than in the short term, which is all that politicians in an election year care about. These politicians want to, by November, be able to claim that they saved the economy by passing this rebate plan. That can only happen if we spend the money. If we save it or pay down debt, some politician ten years from now might be able to say that the economy is better off thanks to the rebate plan of 2008, but who will care then?
Don’t get me wrong. If you need the money to cover basic expenses or tackle some other much needed project or expense then, by all means, spend away. Heat, food, shelter, and water are important. I just don’t like being told that, even though I have no need for the money right now, I should rush out and buy a new thing-a-ma-jig that I don’t need just to prop up the economy. And I definitely don’t like being called unpatriotic because I choose to save, rather than waste, money. If you’re giving me money, then it’s my choice what I do with it.
While I think this will help the economy in the short term by getting people to spend, I would much rather see $193 billion go to something that might help the economy long term to get us away from this “spending is the only way to grow” mentality that we have. What about some job training or job creation programs? Maybe invest in programs that research, develop and produce alternative fuels — if we could get a serious alternative fuel industry going it would create jobs. Why not spend the money to help bring manufacturing back to this country? That would create a lot of jobs. Why not invest in infrastructure? That would create jobs that get people out there designing and building better roads, water systems, and power systems. It just seems to me that there has to be a better way to spend this kind of money, ways that would help us farther down the road, rather than putting a Band-Aid on the economic problems in this country.
So what will I do with my rebate check? I’ll either drop it into my IRA or into my emergency fund so that I can draw on it later. That way, when Uncle Sam decides he wants the money back in the form of higher taxes, I’ll have it to give. Just call me unpatriotic.
Image courtesy of swanksalot
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