The problems with just giving each of us a check

[ThomWV]

In the last month and a half I've seen hundreds of suggestions that the economy would be quickly improved if each of us were just given some presumably large amount of money. Sometimes its a thousand and sometimes its a pie-in-the-sky million but its always a lot.

When the per diem payouts are suggested I don't recall seeing anyone explain where the money will come from, other than the infamous "Government" will pay it out. How quickly we forget that 'we the people' are in fact the Government and that at once puts us in the rather preposterous position of saying that we will give ourselves the money; a transfer from left hand to right hand you might say.

Well, just where would the "Government" get the money to write each of us a check? In the long run out of taxes we will be paying in the future is the right answer of course but that doesn't answer the question of where the money comes from the day it hits our checking account.

The first possibility as to where the money might come from is that the government will simply write a bigger number into our accounts and that will be that. Presto, just like magic the money will come into existence as if pure light were cash and the stars our banks. Of course the problem with doing it this way is that this practice, which is usually called "printing money" causes immediate inflation directly proportional to the amount of dilution of the money supply created by the injection of cash in the first place. In other words prices would go up immediately and eat up the cash.

The second alternative, and the traditional one for our nation, is to simply enter the world market and borrow the money to put into everyone's accounts. We'll pay back the loans later with tax revenues. The first thing you might want to ask about this approach is just where would anyone get enough dollars to lend every single one of us the thousands of dollars proposed? Look no farther than the shelves of Wal Mart or the corner gas station to get your answer. We gave the Chinese and the oil-rich nations all the money that was needed (but was diverted from) for a sound domestic economy and now we need to borrow a good deal of it back. Ask yourself, is this an approach we should favor?

Even beyond the question if we favor this approach one wonders if the dollar-rich nations are much interested in 'investing in America' right about now. They were burned when they trusted in presumably sound US mortgages, what would give them incentive to invest now in little more than our promise to behave ourselves better in the future - oh, and by the way, at close to 0% interest if you please. They won't be there forever.

The argument is no different of course if the money is used to bail out banks rather than individuals.

[eShirl]

1. "The argument is no different of course if the money is used to bail out banks rather than individua

Good point.

[soothsayer]

2. shoulda' given it to us instead of robbing it from us in plain sight

[sandnsea]

3. There are no checks coming

So you might want to make a different argument.

[ThomWV]

4. My plan was to point out why

I just wanted to try and explain it in a way that made a little sense. Most of the folks that talk about what is going on talk way over the heads of people. I think they do it on purpose because if you just look at is simply the whole thing might be just a big bag of burning shit, but not all that hard to understand.

[napi21]

5. I would rather see a concentration on the infrastructure rebuilding

that Obama talked about. Infrastructure can be lots of things...bridges, roads, electric grid, expanding broadband, etc. THAT would expand the job market everywhere, and if Americans have money, they SPEND IT, thereby boosting the retail market, and enabeling people to pay their mortgages.

I personally don't want a check. We don't have much, but we're getting by just fine.

Putting the necessary money into a national health care system would also be a much bigger benefit, not only for people, but for business too.

[Trajan]

6. I dont want a damned tax cut ....

I want a pay raise ....

I want pay raises for ALL workers ...

LESS to dividends ... MORE to workers .... MORE money in the mighty economic machine at the bottom, to filter up through small businesses and large businesses alike ...

[Still Sensible]

7. I don't know about not sending checks though...

it seems that some of it should get spent quickly if we're going to see any immediate improvement. As I read it, everything looks like it will be good in the long run and I am all for whatever portion they want to put in creating jobs repairing infrastructure. I fear, though, if real economic relief isn't going to be seen for a year or 18 months, I don't know if that is quick enough.

[ROakes1019]

8. economic problesm

I remember, as a child, studying the Great Depression and how we finally got out of it. I was only ten at the time so I didn't understand it all but this I did get: if the government simply gives the people money, inflation, as the poster noted, will occur. There will be too much money chasing too few goods. Printing more money creates the same problem. The ideal is to get money to people for value added. That's how the CCC and WPA came about. People were put to work on infrastructure, adding value to the nation, and, in turn, giving people money to spend. There has to be some value attached to the money people receive or we're just shifting paper (money) around. I'm no economist and I don't have the answers. But borrowing to hand out money to citizens doesn't seem like the answer.

[RC]

9. Instead of bailing out banks or mailing checks to people, how about

creating jobs. Rebuilding our infrastructure: roads, bridges, rail systems. Use glass instead of copper for communications. rebuild out electrical grid. Research more efficient ways of transmitting electrical power or maybe new ways of generating it locally. Let the rich get in the same line as the rest of us for living wage jobs if they want to make some money.