Wednesday, February 18, 2009

Why I am Somewhat, Infinitesimally Apprehensive of the Obama Stimulus Package

Just a day ago, President Obama passed a $75 billion stimulus package in hopes that it will start the economy up and begin the end of the economic crisis. However I remain somewhat skeptical of the effect of such a bill, not because I fear that it will not work, but because I fear that private individuals will hoard the money that they have and will receive from the government.

In an economic environment such as today's, people make significantly less money, and because of that, spend significantly less. In order for money to flow freely through a society, people must spend money in order to circulate it around social classes. When people spend, the entire economy benefits. However, as people are hoarding that money in fear that the economy will get worse, less money circulates and what money which is saved accrues and collects dust in the private vaults of individuals.

The ideological shift away from materialism in many individuals, while helpful for the happiness of those individuals, is unhelpful to the economy as a whole. Unmaterialistic people are happier people because they have less crap weighing them down, but because they buy less, they also tend to have more money gathering dust in their coffers that could be used for charitable purposes.

The rich and wealthy are also not helpful in energizing the economy, despite how much they produce. As they have the most money, they have the ability to be the most helpful people in stimulating the economy. Thus, should they spend more money, the worldwide economy will benefit.

Hoarding never helps in bad economies, so it is partially the responsibility of private individuals to help the economy recover.

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