THE economic stimulus thread

[Flubber]

Originally posted by Kidicious
Flubber,

I'm a tax preparer. I know for a fact that not everyone is going to spend unexpected money. Some people save it, or just don't care enough to make any decision at all about it because it's just not enough to get on their radar.

You've already admitted that Bill Gates wouldn't care about a tax rebate because he's too rich. A person who makes 150k a year might care more, but it's not likely that they care much at all, and the money would just be neglected. It would just be added to what they have and not thought about much.

Kid

I make around 150K a year-- I was happy about a 400 lump sum and made a specific purchase. MY wife made one with hers and we put our sons in his college fund since , well, it was really his. If 400 was added to my salary divided among 26 biweekly payments I would neither notice much or care. But you discount the psychological impact of "free money"-- All across Alberta, women bought spa days and purses and dresses that "cost too much"-- Guys did the same with electronics and hockey tickets and new sports gear (Obvious stereotypes but you get the idea)- A lot of those purchases would NOT have been made at that time without the concept of "free money'-- Its an excuse to splurge.

To put it bluntly I would care about a thousand bucks!!


While I know you know everything because you are a tax preparer I don't see why you are so blithely rejecting the experience of someone who actually experienced a widespread government handout.

The Alberta one was different since it

-- went to every Alberta man woman and child-- non tax filers had to apply some different way but they got it and the richest got it too
-- It wasn't to stimulate the economy--it was a whim of a premier that had too big a budgetary surplus-- Alberta was affluent and unemployment was essentially at zero




OH and I know not EVERYONE will spend it. But my claim is that people in the for example 40K, 80K, 120K and 160K areas will spend or save in about the same proportions. For every 160 K person that "doesn't care", I'll show you a 40K or 80 K family that tosses it in their children's education fund or their own retirement fund since those are underfunded.

All I can tell you for certain is that when the cheques came out here it was a topic for a couple of weeks--'How did you spend your "Ralphbucks" was a common question'

[Dinner]

I do think poor people are more likely to spend money they recieve then rich people. That said, a poor person might get $600 and then immediately spend exactly $600 while a rich person might invest the money, sit on it for a while, or he might just go out and use it as a down payment on an expensive new toy costing much more then $600.

The poor are more likely to spend it though those rich people who do decide to spend it will likely spend a lot more then just that $600.

[Dinner]

Of course the obvious problem is that people on Social Security are not workers so the elderly and the disabled are SOL yet again.

[Flubber]

Originally posted by Oerdin
I do think poor people are more likely to spend money they recieve then rich people. .

I wouldn't dispute that if "rich people"are those millionaire types.

I do dispute you if you think rich people means those people earning upper middle class wages. Those are exactly the people that might spend 400 on a gaming console they probably would not have bought because they could use their "free money"

I just know the behavior of my co-workers and friends with the Ralpbucks-- almost everyone bought modest luxuries with them-- Its anecdotal but the experience is real

[Kidlicious]

Flubber,

You are only one person, so yes I'm discounting your experience since it doesn't really say anything about most people. Also, I know that wealthy people will spend most of their money, just not as large of a portion of it as less wealthy people will. Also, generally speaking money is more valuable to poor people since they have less of it.

[Kidlicious]

Originally posted by Oerdin
Of course the obvious problem is that people on Social Security are not workers so the elderly and the disabled are SOL yet again.

Unless they have a tax bill.

[Arrian]

The wife and I were chatting about this last night and concluded that if we got a $600 handout, we probably would replaced my aging computer. Failing that, I figure we'd spend more freely on our vacation in March (Hawaii).

Anyway, both Kid and Flub are right here. Flub is saying that many upper middle class types would spend a handout, whereas Kid is saying that an even higher percentage of poorer folks would spend it. I agree.

-Arrian

[Imran Siddiqui]

Well not many "upper middle class" will be able to spend the handout, since the rebate is capped at $75,000 for individuals ($150,000 for married). Though I guess that depends on your definition of "upper middle class" .

[Arrian]

Right. We were talking theoretically.

-Arrian

[asleepathewheel]

Originally posted by Kidicious
Flubber,

I'm a tax preparer. I know for a fact that not everyone is going to spend unexpected money. Some people save it, or just don't care enough to make any decision at all about it because it's just not enough to get on their radar.

You've already admitted that Bill Gates wouldn't care about a tax rebate because he's too rich. A person who makes 150k a year might care more, but it's not likely that they care much at all, and the money would just be neglected. It would just be added to what they have and not thought about much.

Unless you're putting the money in a jar at home, it is being reintroduced into the economy. 99.9% of the tax rebate money will be out of the consumer's hands and into the economy within two weeks of receiving the check, I guarantee.

[Kidlicious]

Originally posted by asleepathewheel


Unless you're putting the money in a jar at home, it is being reintroduced into the economy. 99.9% of the tax rebate money will be out of the consumer's hands and into the economy within two weeks of receiving the check, I guarantee.

You can't really say that with the credit crunch. Just because money is put into the banking system doesn't mean it is put to good use since the banking system isn't working that well right now.

[Kidlicious]

Does anyone actually believe that they are serious about stimulus though. I think it's just politics at this point. If and when they do decide to really stimulate the economy the **** will surely have already hit the fan.

[Patroklos]

It is a bribe, plain and simple.

[pchang]

The Government says I'm rich

The beggar on the street says I'm rich
Kid says I'm rich




Why don't I feel rich.

[DinoDoc]

You live in San Fran, don't you?