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Can someone explain how a "stimulus check" stimulates the economy?

What I see is, the tax payer pays their taxes, the government, through their extremely expensive bureaucracy distributes checks to everyone, depending on their income. Where the people that paid less taxes, get a larger check than the person that paid more...

1) it seems like more money is going to those with less disposable income, so they are more likely to save it or use it to pay off debt, versus spend it

2) The bureaucracy cost money to issue the check, thus wasting money.

Wouldn't it make more sense to give the tax payer a cut? It would cost less and he or she would be more likely to spend it as disposable income...

10 Answers

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  • 1 decade ago
    Favorite Answer

    The "make more sense" is not part of the equation.

    Bad money drives good money out of circulation.

    We have a big trucking company in town (with a killer safety record), that should fold as it is bankrupt, but no, it is allowed to drag better companies down, all thanks to the bailout money.

    Incompetence subsidizing incompetence.

    Or rather taxpayers subsidizing gross incompetence.

    Ah... nothing like good old fashioned socialism.

  • 1 decade ago

    the idea of getting a physical check in the mail make some people consider it a 'bonus'......not a repayment. They are more apt to spend it as an unexpected bonus.

    If you cut taxes as a stimulus, it will have to be more than just a few dollars.....that just disappears in with other expenditures. If obama gives each couple a yearly total $1000 cut, do you realize how much that is.......BEFORE taxes?

    $83.00 a month. Yep, a whopping $83 split between two paychecks! What are you going to do? Buy an extra tank of gas on the gov't? the amount is not going to appear to be much help and offer no stimulus for anything. It might pay for a phone bill, but that's it.

    America would be tossed a token. Businesses that practice poor work ethics will get a boon!

  • 1 decade ago

    spending from low/middle income families is what stimulates the economy since they make up the majority of the population. if they have no money to spend outside of the necessity, food, shelter, utilities, etc. this further weakens the economy.

    it's not necessarily the best solution but doing nothing certainly isn't going to help the economy. going into further debt with a stimulus is basically like borrowing from Peter to pay Paul.

  • mom
    Lv 6
    1 decade ago

    The idea is you get the check, you spend the check, the store makes money, they pay their employees and the people they bought the merchandise from and they pay their employees and the people who made the merchandise, which probably sends it directly to China since we have little manufacturing here anymore. So if you want to stimulate the American economy, find American made products to spend it on.

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  • 1 decade ago

    It won't/ Think people the money has to come from somewhere. It will be taken from other program and taxpayers.This stimulus thing accually is for Obamas programs he wants. And will not do anything for the economy until 2010. Most democrats do not want this bill. Go look on the democratic party website and you will see what is all in this package

  • 4 years ago

    each and every of the stimulus bill is, is wasteful democratic spending. little or no of that's going to certainly help the financial device, and what does help the financial device will take countless years to make a distinction. my wisdom is that unlawful immigrants gets a stimulus verify, yet those persons that are individuals won't! regularly occurring democrats for you! the perfect thank you to get the financial device going returned is to diminish taxes on small company, which as all of us understand small company is the backbone of our financial device!

  • Anonymous
    1 decade ago

    This is simple. Big brother takes ten dollars from you and gives five dollars back to you. Now you are stimulated.

  • 1 decade ago

    You give me a check. I will get stimulated!

  • 1 decade ago

    we all get checks,go to wal-mart and shop,and the money gos to China, shoot wrong economy

  • 1 decade ago

    oh, thats easy, cause GW said it would.

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