Most economic boosting way to use stimulus $

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Dream of Freedom
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Most economic boosting way to use stimulus $

Post by Dream of Freedom »

As most of you know they are trying to get a bill passed that would give Americans $1200 per adult and $500 per child. Although providing money to the system through holding stock may help society long term I don't think it would give the short term boost that the money is intended for. What should we do with the money to have the effect economic effect without squandering it for yourself.

George the original one
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Re: Most economic boosting way to use stimulus $

Post by George the original one »

Spend it locally in a way that helps wage earners or small business?

Gilberto de Piento
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Re: Most economic boosting way to use stimulus $

Post by Gilberto de Piento »

I agree with George and will likely do that if the money arrives. Or give it to a local charity.

Peanut
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Re: Most economic boosting way to use stimulus $

Post by Peanut »

If I'm understanding the proposal correctly, we should get $3400 of stimulus money. Initially I suggested we donate it, but since I got roped into delivering groceries to an elderly woman at my church who now texts me regularly, I decided I don't need to be that magnanimous with it. So I'll probably blow it on home maintenance that I've been planning--re-painting, new Toto toilets, etc. through local businesses.

sky
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Re: Most economic boosting way to use stimulus $

Post by sky »

I will use the money in a way that benefits me, not the government or economy.

ertyu
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Re: Most economic boosting way to use stimulus $

Post by ertyu »

For max economic impact, spend the money in a way that puts it directly in the hands of low-income people. Low-income people spend the greatest percentage of each additional dollar they earn, so that the money you give them will all become someone else's money in its entirety. Richer people are likely to save some and spend some, so the proportion that becomes another person's income is smaller. Large corporations may also use the money to pay down debt or in other ways that doesn't put it in the hands of their workers as income. For impact, you want the money to circulate among regular people as many times as possible.

bostonimproper
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Re: Most economic boosting way to use stimulus $

Post by bostonimproper »

I think we're over the income limits for stimulus $, but in general we're donating a lot to local food pantries and mutual support networks (i.e. directly giving to individuals in need of money to pay for food, water bill, rent, etc.). We're also shifting all grocery spend from national chains to local CSA's + regional chains.

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Re: Most economic boosting way to use stimulus $

Post by jacob »

https://www.nbcnews.com/politics/congre ... u-n1168936

How the stimulus money will be paid out in practice.

Scott 2
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Re: Most economic boosting way to use stimulus $

Post by Scott 2 »

Where does the money come from? Is it a transfer of wealth that slightly lowers the value of any cash people are holding? Am I right in thinking the increased velocity of cash, causing more productivity, is in hopes of heading off deflation? A last ditch effort to avoid 0 or negative interest rates?

I can't find anything that says I pay it back when completing 2020 taxes.

It is going directly into my savings. IMO the income limit is way too high. My spending has nothing to do with this month's cash inflows. I'm way too preoccupied to have a couple thousand dollars change any plans I've already made.

Scott 2
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Re: Most economic boosting way to use stimulus $

Post by Scott 2 »

Looks like some unemployment and student loan related money as well?

https://www.nytimes.com/article/coronav ... swers.html

Jason
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Re: Most economic boosting way to use stimulus $

Post by Jason »

Boeing stock. This way if I make it to old age I have a chance of breaking even on this bullshit.

Campitor
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Re: Most economic boosting way to use stimulus $

Post by Campitor »

I think from a practical perspective, I will use the money to invest in stocks or put it towards a real estate purchase.

The consumerism addiction in the US is so strong (avalanches of toilet paper anyone?) that any hoarding or investing done by the smaller segment of the population will not impact the intended short term stimulus $1200 will make. Eventually it all goes toward corporations anyways since even small businesses depend heavily on the corporate infrastructure to procure, produce, store, sell, or ship goods and services.

ertyu
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Re: Most economic boosting way to use stimulus $

Post by ertyu »

Dream of Freedom wrote:
Tue Mar 24, 2020 6:41 pm
As most of you know they are trying to get a bill passed that would give Americans $1200 per adult and $500 per child. Although providing money to the system through holding stock may help society long term I don't think it would give the short term boost that the money is intended for. What should we do with the money to have the effect economic effect without squandering it for yourself.
Encountered a study today: apparently, tip a waitress or a hotel maid - an additional dollar of income has the greatest velocity that way. You're welcome, and happy tipping

IlliniDave
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Re: Most economic boosting way to use stimulus $

Post by IlliniDave »

It appears I'm above the cutoff so it's purely academic to me. But I would hold on to a part of it until businesses such as restaurants open up then spend it there. I normally spend almost no money at those businesses. The rest I'd probably give to my kids. Both are having modest struggles with all this.

ba199
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Re: Most economic boosting way to use stimulus $

Post by ba199 »

...For those that don't know, it's really just a tax advance for a refundable credit in the 2020 tax year.

https://www.cpapracticeadvisor.com/tax- ... s-payments

20sharkall03
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Re: Most economic boosting way to use stimulus $

Post by 20sharkall03 »

If we're looking at pure textbook sense of "velocity of money" then spending the money at locations that provides the greatest portion to low income earners would most likely be best as they are going to spend more of their low income on essentials and increase the speed at which money is turned over.

The most economic way to use the stimulus money is probably mindset dependent.

ERE mindset has our family wanting to purchase tools/equipment/capital with the stimulus money. This would be a fine time to upgrade my beer making equipment so I can transition from LME and kit beer to all grain brewing; decreases long term costs of making good beer. This is a good opportunity to purchase 4-6 fruit trees, rent an aerial lift and cut down some trees that don't contribute to my web of goals so I can boost the productivity of my city dweller land; can make sauces, jams, pies, cider etc from these productive units. This will have a long term effect of decreasing my dependence on this system that is apparently stressed over a virus. On our end the money could also be used to purchase an aluminum trailer that will help with the movement of materials that are essential to us. All these items would spend over half of the stimulus on products that I can purchase from small businesses. Trailers are fabricated right down the road, home brew shop is local and the fruit trees are from an individual orchard six miles away.

Or I can dump it all in savings/stock and flex my savings rate muscles.

Low income persons will spend it on rent, food, childcare etc. Basically essentials. This is good for your small scale landlords, local grocery stores essential employees who are already being put at risk.

Lucky C
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Re: Most economic boosting way to use stimulus $

Post by Lucky C »

Ideally if you could know ahead of time which local businesses were on the cusp of going broke through all this, you would know where to best spend your money without "wasting" it on a business that would have survived anyway or one that is hopelessly headed for bankruptcy no matter what. I wouldn't buy a bunch of gift cards for a hole in the wall restaurant that wasn't packed on the weekends, for example. I will however happily spend extra at the local dairy farm and bakery, which is easily twice the cost of the same stuff from the grocery store. They still seem to be doing good business through this so far, but I could see them losing some customers with people not wanting to spend their unemployment checks there, and it would be heartbreaking to everyone in town if they had to go out of business. Plus they are exercising caution and doing curbside pickup only so it's theoretically safer than the grocery store too.

samlarson
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Re: Most economic boosting way to use stimulus $

Post by samlarson »

This may not be a popular position to take just now, but all this federal government relief money to prop up our economy in this national emergency may be necessary but it's going to come back to bite us in the long run. I know most of us aren't thinking right now about the adverse impact on the federal budget, not to mention the national debt. What'll it be after the emergency is over? A huge tax increase? Or a painful reduction in social service benefits like Social Security and Food Stamps?

Financing a national emergency, historically, has been by either bond drives or tax increases. "Buy bonds!" was the rallying cry during World Wars I and II. Unfortunately we don't do war bonds, anymore. In modern times, wars like Vietnam, Iraq, and Afghanistan should have been financed by tax increases. Instead of tax increases we had tax cuts. So the budget deficit was already in the stratosphere prior to this virus pandemic.

Basically in my opinion you could spend this money every possible way you can think of, even on a trip to Vegas. Because you are helping local business and therefore economy to survive. But if you decide to hold on on that money and now spending them right away you government may decide that this tactic is inefficient ( if more that a third or the population will do the same ) and stop aid altogether.

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