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Posts: 1396
| raftman - 5/17/2021 9:09 AM
TCESOX - 5/16/2021 4:07 PM
The stimulus money, on the other hand, has been used by many, to pay off credit cards and buy toys like TVs, up-grade boat electronics, new trolling motors, etc. Which is what it was intended for - to stimulate spending to keep businesses from experiencing a gigantic loss of business and causing a huge ripple effect in the economy.
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Is this a good thing though? We artificially increase demand on things that can't be easily replaced for a variety of reasons and now we have shortages. When I walk through the hunting and fishing aisles at fleet farm there still are a lot of bare shelves. I don't think there's much of anything that isn't in short supply right now. I'm hoping the recent rise in inflation levels off but I'm a bit concerned all of this money just being dumped into an economy that isn't showing any ability to replace the goods being bought is going to lead to a long recovery and the people advertised as being the ones we need to hurry up and get money to when they sell these stimulus plans will be hurt more than anyone.
I have no idea if it is a good thing or not. The various permutations of macro economics are extremely complicated, and even experts can get it completely wrong sometimes. I do know that this was specifically designed to help people pay down minor debt and spur retail sales, at a time when there was real fear that retail could be devastated if people became too austere. And in fact, that is what most of that money was used for. It was not a need based mechanism. While it did help those who lost jobs, whether they were eligible for unemployment or not, most of those folks probably spent the money just staying afloat. However, many people making less than $75,000/yr for singles, and $150,000/yr for couples, had not lost their jobs, or suffered financial hardship, and were still targeted for the stimulus money, precisely because they would most likely pay off their credit cards and buy stuff.
We'll see how it shakes out in the end. There is no playbook for something like this, and both the previous administration and the current one, acknowledged that something drastic needed to be done. Precisely what, is the million dollar question. Whatever has been done up to now, is probably better than having done nothing. Some economists have been saying for quite some time, that a little inflation is something that is overdue anyway, and as was mentioned, we can't really rely on the recent numbers, as they are so skewed. | |
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