Economic Stimulus

Let’s face it, when it comes to economics I am not that savvy. I am however fairly adept to managing my household finances and in a former life, small business finances. So with that preface I’ll leave you to judge this post on it’s own merits, but filter it for BS.

I’m concerned. The Fed’s plan to stimulate the economy with a massive $150 Billion giveaway is counter intuitive. Certainly I will smile as the check lands on my doorstep and eventually in the bank account, but spend it, I won’t.

I am one of the fortunate ones. I have a great mortgage with a fixed interest rate. Two cars with payments that I plan to keep long term and will have no consumer debt in 30 days. I spend and I save, but have developed good habits. And those good habits are what keeps me from firing off a wad of cash given me by the Fed into a retail store on crap that I do not need.

So let’s talk tactics. If the Fed really wanted to help they would buy each of us $600 worth of stock. The rules might be 1) you have to keep it invested for two years. 2) we each get an investing 101 training course to make us smarter around the subject. Now it is ours to lose, or ours to grow, but it invests in businesses that create jobs and produce the products we need and want. It isn’t simply a flash in the pan. This isn’t a petty game we are dealing with here it is a very important plan.

Now another way that the Fed could do this wiser is to invest in work projects that provide education as a portion of the plan. The works programs of the early to mid-1900s offered economic stimuli while investing in the greatest resource our nation has to offer – its people. When people have good jobs they are well paid. This paycheck in turn purchases the goods and services produced by the good job. This is simple really, but takes a little more time to get going. I think personally the election year is simply allowing for the one-off successes that have no real long term gain. But that’s just this American’s opinion. What’s yours?