
We have physicians, preachers, roofers, and teachers on our mailing list, but I don't recall offhand if we have any economists. We might well. If so, perhaps one of them can chime in regarding the so-called "stimulus package." (And thanks in advance,
Keekley, for the inevitable reply about stimulating your package.)
It seems to this layperson that the current "economic crisis" is largely related to three phenomena:
- The high price of energy is making everything a little more expensive.
- People are carrying too much personal debt and thus either spending less or putting more money toward servicing that debt.
- Homeowners can't continue borrowing against the equity in their homes, either because they are maxed out or because lenders are tightening up.
So: How will giving people a one-time "windfall" ($600 and up depending on income and other factors) with instructions to buy a new TV or a set of tires alter the dynamics above? It may—may—give retailers some transitory relief, but then what?
If at least some of the "crisis" is due to consumers being over-extended, is it reasonable to expect some of the rebate money will be spent merely on paying down debt, thus providing no stimulus? If so, how much?
Won't much of the money that
is spent go for clothes, electronics, and other goods made abroad, largely stimulating other countries' economies more than our own?
Since the rebates are coming with implicit directions to go forth and spend, wouldn't it be even more effective to give the money directly to Wal-Mart, Home Depot, Chili's, et al.? Why or why not?
Don't get me wrong. When it comes to game shows and lottery payouts I'm definitely an I'll-take-the-cash kind of guy. But I resent the implication that comes with this proposed rebate, namely that I, we, "consumers" are somehow partly to blame for the current softening in the economy because we haven't been spending enough. And that we are somehow too stupid to see the rebate for the
shameless, short-term political ploy that it is.
On to important issues: Please
let me know if you will or will not be playing hoops at St. John's this week. We tip off at 8:00 a.m. tomorrow, as usual.