Mrcrider’s Weblog

Every once in a while I like to have a serious political conversation about something that I feel is an issue. My brother and I were on our way to the gym yesterday when we heard someone comment on the $600 refund that “impoverished” persons will be receiving coming up very soon. This sparked some very interesting debate between my brother and I, mostly due to the fact that our views are the antithesis of each other. None-the-less I digress to the actual topic at hand.

For a basic understanding I will describe what will be happening, at least to my understanding. The U.S. government is giving low income persons an extra $600 for single people and an extra $1200 to married people. This on the surface, to most consumers, seems like a fantastic idea without including any economic background. My brother argues the point that this is a waste of money. Another ignorant plan by some genius economist who feels this may stimulate the economy. I couldn’t disagree more, the idea of giving the masses a surplus of money is theoretically an ingenious idea. Here’s why, the low income consumer most generally speaking will purchase amenities not essential to living (i.e. clothes, electronics, random gadgets) this in turn will greatly raise the business profits. The greater the influx of customers the more man-hours that the business will require to maintain a homeostasis. Which by in large means two things more jobs will be created to deal with the increase in demand and more hours for those people already employed. This will then give those workers a greater income or extra income, which the surplus created will make the cycle perpetuating. More hours, more income, more spending, creating more jobs, which increases income, which increases spending, so on and so forth. His rebuttal to this was simply put, the products that we will be purchasing are not domestically made therefore the greater demand for these products will help foreign big business more than American big business. Which I quickly replied even though the manufacturing end of the scale maybe tipped in the direction of foreign trade, the suppliers (Best Buy, Circuit City, Wal-Mart) will still benefit none the less. I feel that this theory can work but unfortunately there are those who quite literally waste this extra income on vices which really takes away from the idea behind it.