With an economic “stimulus” package coming our way, we should at least be aware of what it means. If you are one of the lucky welfare recipients, you might want to invest that money carefully.
This so-called stimulus package proposed by the President and revised by the Congress will send checks to anyone that earned income last year (above $3,000). Unfortunately, if you made “too much” according to the enlightened and philanthropic bureaucrats, then you may get nothing, even though you probably pay far more in taxes than those receiving checks. If you have a child, you will get an additional $300. Two children: $600. Three children: $900. And so on to infinity.
This is just a pure redistribution of wealth, pure and simple. It will not stimulate anything because the money has to come from somewhere. If it were that easy, why does the government have to be so stingy? Why not send checks to everyone for $50, 000 a piece? That would be some major stimuli.
Since the government is not cutting spending at all, the only way to fund this scheme is to borrow the money or print the money. There is no free lunch.
So if you are not getting a check, don’t worry. The poor saps will be wondering why food and gas are so expensive next year. Of course, most will have spent their checks by then. And even if you are getting a nice check, you can be wise with it.
If you have credit card debt or any other bad debt without a low interest rate, you should obviously pay this off. You should also make sure you have some kind of an emergency fund that is liquid.
But if you can invest, then you can hopefully protect yourself from these destructive government policies. Look at getting out of things that are dependent on the U.S. dollar doing well. As the government prints money to send out the checks, it will continue to devalue the dollars we have. We should own hard assets or funds that invest in hard assets.
If the government continues creating money out of thin air so blatantly, you will see real estate turn around in the next several years. As the dollar continues to devalue, a hard asset like real estate will probably go up. It is going down right now because it was a bubble where too much money went in too fast. But it will reverse if we see high inflation.
A true economic stimulus plan would require more savings and investments for individuals and corporations. The government should reduce spending while cutting taxes and regulations. But since it is not, we have to invest accordingly.