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Q: Dear Mr. Man.
Do you the Stimulus package will help the economy?
A: Anytime an entity such as the government spends over $1 trillion (including interest and fees), it is bound to help the economy. There are measures that will have an immediate impact (funding for police and fire departments to prevent layoffs, for example). However, the overall package will take too long to provide the stimulus as intended. What about the $400 tax credit being sent to 95% Americans. That equates to $7.69 per week by my math. I’m not an economist, so I may be missing something. That might feed one of my kids for one meal.
I am also concerned that there is no clear plan to pay down this additional debt.
I applaud the President and Congress for making this a “pork” free package, but this package has fallen short. There are better ways to stimulate the economy and exercise fiscal responsibility.
How does one stimulate the economy? The fastest growing industries (according to the Bureau of Labor Statistics ) are all a part of the service economy. Businesses providing goods and services to Joe Consumer. If there were a way that you could instantly put more cash into a family’s paycheck, we would gradually see an increase in consumer spending and saving.
I would propose, as many others have, that there is a freeze (six months to a year) or a significant reduction on the federal income tax that is deducted from every working American’s paycheck. This would instantly begin to stimulate the economy because most people would used the extra income to purchase the goods and services that they had to cut back on due to the slowdown.
Even if people choose to save, this gives banks more money to invest and loan. The banks cannot continue to live in fear. They must reopen the lines of credit to Joe Consumer and Jane Business Owner, but do so in a way that is wise and responsible. Do not allow people to consume more than they can afford. Ever.
The stimulus package does not and should not neglect the unemployed. The package has provisions that increase unemployment benefits. Hopefully this will help those who need the benefits as the economy rectifies itself. However, there should be safeguards put in place that ensures that people who are able to work go back to work once the economy strengthens. Responsible citizens will do all they can to get off of the government’s dime. With that being said, the irresponsible should not be supported.
Faith-based organizations should get a share of the stimulus. These organizations can provide nourishment to the body and soul. Working in conjunction with the government, these organizations have the ability to provide hope where there may otherwise be none.
The key to all of this is not to live in fear, but to live strong and boldly. Seek opportunities during these times. Buy stock while some of the blue chips are selling for pennies on the dollar. Do not deviate from the 80-10-10 rule (Tithe at least 10%, Save at least 10%, Live off of 80% of your income) or implement the rule. We cannot afford to live in fear.
Economies are cyclical. We will come out of this. We have to be responsible. We are the only ones that can make this happen.
We are the only ones who can make the American Economy…Man Up.