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The Stimulus Scam

February 19th, 2008 at 06:16 pm

Congress recently approved the “economic stimulus package,” which will provide every single tax filer with adjusted gross income (AGI) of $75,000 or less with $600 and every joint filer with AGI under $150,000 with $1,200. If you have dependent children, you get an additional $300 for each dependent child.

The reason for this program is to get us to spend the funds to help “revive” the US economy. From my perspective, the long term results of this program will not revive the economy, but will serve to put our country deeper in debt.

As one pundit has stated, this should be called the China economic stimulus package. Much of the $150 Billion of additional long term debt that this “stimulus” provides will likely be purchased by the Chinese or other foreign entities. Thus, additional government resources (which come from you and me) will be required to service this debt.

As an added benefit to China, if the money received is spent at WalMart, Target or other large retailer, it will be used to purchase goods that are manufactured in China, increasing our trade deficit. Some “economic stimulus” this program turns out to be.

OK- so our elected officials are scamming us in order to “buy” more votes – what else is new? However, we can take this lemon and make it more palatable.

Here is what you might consider doing. If you have any credit card debt, use the funds that you will receive to pay it off. If you already pay off your credit card in full each month, take the money and use it to pay down some of your mortgage or put it in one of your savings accounts. In 20 years, the $1,200 will be worth over $6,000, if your investments return 8% annually.

We can never keep our elected officials from doing things harmful to our economy, but we can minimize the damage that they do. I hope you will use this “stimulus” to increase your financial abundance.

8 Responses to “The Stimulus Scam”

  1. Thrifty Ray Says:

    In Oregon, we received a state refund kicker check this year.... on the other hand...we also had our public libraries closed for most of the year due to lack of funding...go figure.

    I agree that indebting our country to "stimulate?" the economy is a poor way to buy votes.

  2. reflectionite Says:

    why do people earning more get more money? shouldn't the people earning less money get a little bit more?

  3. Broken Arrow Says:

    Ha! China economic stimulus package! I love it... in a sad, "the truth hurts" sort of way.

  4. mulyanto Says:

    ...Or you could buy made in U.S., it might take a little more effort, but it doable...

  5. Ima saver Says:

    I plan to save all of mine! i think it is a dumb idea also.

  6. finabguide Says:

    For reflectionite:

    Everyone below the income caps that I referenced gets the same amount of money. Even people who pay no income tax will get the $600 (single) or $1,200 (joint)"refund."

    I am personally opposed to government provided income redistribution. I prefer to do this through individually controlled charitable contributions.

  7. reflectionite Says:

    oh i see (didnt read the 'joint' bit!) Smile thanks!

    and also: we had a thing like that in australia about 5 years ago, the government decided to give everyone who had children about $300 per child. i'm not knocking on how you think money should be distributed, but i have to say, it really helped our family out. my mum got $900 because of me, my little brother and my little sister. she paid our overdue school fees and next years, bought us new uniforms that fit! and spent a couple of hundred dollars on shoes and clothes that we desperately needed. i think she might have also bought some new sheets and things... anyway! my main point is, for those that are not doing well financially, and who dont squander it on useless stuff, it's much appreciated.

    just another look at how money like that helps!

  8. finabguide Says:

    I totally agree that the truly needy should receive help and support, even if it has to come from the government. Unfortunately, I don't think that this government "giveaway" is the best way to accomplish that goal.

    My hope is that the more fortunate among us will find charitable organizations that support people in need and our donations will help those organizations prosper.

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