An Assimilation of Prosperity

A stimulant is meant to temporarily boost the activity of an organism. Hypothetically, the heart of government stimulus payments is going to give the American economy a booster shot.

President Bush hopes to spur consumer spending, an attempt that some view as a misbegotten idea sure to come short of what's needed to get the economy on the road to recovery. The formula that the government uses to give validity to a recession is more lenient than what is on the minds of most consumers. Recovery has little relevance to the pocketbooks of cash-strapped Americans.

The sad reality of the payments is that they are actually more like a loan, the repayment of which will be added to other debts placed upon the next generation, possibly two. Those of us in our 50s or older will be less affected, or so we think. But our futures will most likely provide less security as the social costs of Medicare bring higher deductibles and reduced benefits.

Very few are immune from this Administration’s relentless spending of money that just isn’t there. Corporate elitists are the exception. They too will get their share of stimulus dollars, however reduced with a formula that lessens the amount for those making over $75,000, but to them it amounts to pocket change, a dime in their pockets compared to emergency funds as viewed by most of us.

Some people are disappointed in the payment schedule. Payments began May 2nd with electronic deposits. People relying on postal delivery for the legal size envelope with a government-issued check are most likely those without bank accounts, living week-by-week or day-by-day with limited funds. Many will have to hang in there until the final batch of play dough is mailed on July 11th. We’re half way there.

It’s not likely that lower income citizens will spend their dollars as the government intends. Mortgage payments, car loans, outstanding credit card balances and medical expenses will be primary concerns to many people. Food and gas might take precedence above all else. You have to eat; you must get to work. Spending money on luxury items will be less common.

Sunday newspapers will continue to offer deals with pages of glossy inserts offering a myriad of enticements to tempt consumers

The government cringes at the word “savings” but people are beginning to realize that having cash reserves is a means to ward off future economically challenging times. Years of false security and promises of ever-increasing buying power have come to an end. Frivolous spending has helped damage the economy. Living on borrowed money has to stop.

When analysts suggest dwindling home values are a natural order to bring pricing to realistic figures, it also points to a change of consumer habits whereby discretionary spending may come to a dribble. This will be devastating to an already gloomy economy but it may be necessary to bring America down from its high-hat altitude.

For years, consumers have accommodated corporations and their executives with mounting fortunes. A 360 is in order. Their profit margins will have to right size the economy. Many sustain their profits by reducing their workforce. Wall Street has a history of going goo-goo every time layoffs are announced, ignoring the affects of declining wages and unemployment. Us poor folks can no longer fill the corporate feedbag.

Whichever way you look at it, bailouts by the federal government are poor business practices. Ultimately, it is put on the economic shoulders of every taxpayer; many are spent-out. This land of milk and honey is turning sour; the hive is near empty. For the past three decades, we have been led to believe the trickle down effect from corporate successes will bring us all prosperity. The tide has turned and the lost earnings of the millions of American jobs shipped overseas are biting these businesses where it hurts in the end: sustainable profits.

Perhaps the best any of us can do with our stimulus dollars will be to give a little boost to
local businesses where friends and relatives are employed. Otherwise, those loved ones may find themselves in the ranks of the unemployed.

Whatever you do with your stimulus payments, it will be an assimilation of prosperity. The real thing may be a long time in coming.