In the face of the apparent sputtering of the $700 billion bailout, I keep thinking about how at least two-thirds of the American economy is fueled by consumer spending, and how we're caught in this vicious cycle of consumers tightening their belts and not spending, which then causes more economic woes, which then ramps down spending, and so on.
In the face of the bank bailout, the very top-down bailout, it seems like the quickest, surest way to offer a short-term jumpstart to the economy, something to buy some time for, say, the Obama team to wrangle out some real reform of our system, would be for there to be more checks cut and sent out to Americans. Real stimulus checks, at least double what was originally sent out.
Wasn't it something like 116 million Americans who received the checks last time? So, imagine, instead of pumping $700 billion to banks, lobbyists, whatevers -- that $700 billion went to the 116 million Americans who got stimulus checks last time.
That would be, what, a little over $6000 to 116 million Americans? These same Americans who would likely immediately spend that money, because they'd need that money right here and now. That would pump it right into the economy, literally buying the government time to address the larger structural problems afflicting our economy. I just can't believe that money like that couldn't immediately help. Of course, maybe the government is afraid people would just sock that money away, but eventually, that money would be spent.
It's just paradoxical to me how an economy that is driven by consumer spending isn't front-and-center in the government's plans. The problem with the economy is that American wages have stagnated, people are losing their jobs, and simply aren't able to spend like they used to.
It's like we hear over and over again about how central consumer spending is to the health of the economy, even as less and less is done to help consumers spend. Wage stagnation, mounting debt, escalating cost of living expenses, fuel costs, home ownership woes -- these are what are contributing to the economic meltdown, as everyday Americans are feeling the pinch.
But I'm sure we'll just see more top-down bailouts carried out, more billions thrown to lobbyists, bankers, whomever, in hopes of getting them to do business with each other, while at the bottom of the economy, Americans won't be able to buy anything those companies are churning out because they don't have any discretionary money.