Economic Stimulus Archives - Lazy Man and Money

I’m reading about the big three car maker bailouts and I’m not sure whether I want to laugh or cry. I think I’m leaning towards crying. I understand that car makers circulate significant money through the US economy. My question is: aren’t there a lot of businesses doing the same thing?

Are we going to see T.G.I. Fridays asking for a bailout next? Aren’t they hit hard by the falling stock prices and the economy? It’s pretty clear to me that people are going out to eat less. Why else would every restaurant want to save me money? If T.G.I. Fridays goes under, cooks and waiters will be out of business. Companies that supply Fridays with food will lose business. Surely Friday’s is deserving of some money, right?

Let’s take it to another level of absurdity. One of the first things that companies cut in the rough times is advertising. This blog is supported entirely by advertising. If there’s no advertising, I make no money. If I have no money, I don’t spend it on restaurants and other things. So, due to the poor economy should I get some bailout money? Wait a second, that’s what the economic stimulus packages amount too, isn’t it?

Maybe I’m just not very smart, but it seems like this just moves money around the United States. It doesn’t seem to bring in new outside money. The Red Sox had general manager named Lou Gorman once. Whenever he couldn’t make a trade to bring in a great player, he’d say, “You can’t rob Peter to pay Paul.” By this he meant that you always had to trade something of value to get something of value. So with these bail outs, aren’t we simply robbing a nation of tax-paying Peters to pay a few car-making Pauls? Perhaps we should focus on tourism so that we bring in dollars from external sources.

I (and I’m not the only one) have a problem with people getting a break when they make irresponsible decisions. I think it sets a bad example for one. However, I also feel that I should be able to get the similar breaks if I need them – especially if I can show that I’m making smart decisions.

So how do you feel about these bailouts? Is there an end in sight? Where does the line get drawn?

Today’s post comes from Miranda Marquit. She writes about personal finances for YieldingWealth and edits debt consolidation information for Destroy Debt.

The “economic stimulus” tax rebates have begun arriving, and now people are wondering how to spend them. Instead of blowing all that cash on something you don’t actually need, why not put part — or even all — of that money to work for you through investing? Here are 4 investing ideas for your “economic stimulus” tax rebate check:

Retirement account – If you aren’t putting the maximum amount into your retirement account, why not use that tax rebate check to bring it up to scratch? Even with a modest rate of return (around 7 percent) over 20 or so years, you can make a big difference in the end result if you put the money in your retirement account.
Index funds – In general, the stock market is struggling a bit. This means that now is an ideal time to get in (you know, the old “buy low, sell high”). You can buy more units for your money. And if you choose index funds, you can enjoy instant diversification. Over time, the stock market gains. You can take advantage of that buy getting in now, even though the returns are modest, averaging between 7 and 11 percent.
Cash – This is not going to get you a great return right now. But cash investments (like a high yield savings account or a CD) can be a good way to build your emergency fund. And they are safe, if you use a bank that is FDIC insured. You can pad your “rainy day” fund with an infusion in the form of your tax rebate check. The money will grow (albeit slowly), and offer you a bit of a safety net. Besides, the Fed has to start raising rates again sometime. When that happens your savings account yield will increase, and you can ladder CDs into something with a better return.
Growth stocks – If you’re the type of person who can stomach a little more risk, this might be a good opportunity for you invest in some growth stocks. These stocks are riskier, and you could end up losing the money, but it you choose carefully, you just might parlay your tax rebate check into some serious stimulus for your investment portfolio. One of the more promising sectors is clean tech.

What you choose to do depends on your risk tolerance and your investing style — as well as your individual needs. But no matter your decision, you can put this “found” money to work.

More Bailouts… Are You Still Angry?

4 Investing Ideas for Your Economic Stimulus Tax Rebate Check