American Stimulus Checks - Saving Money

After reading a few blog entries about what Americans are doing with their stimulus checks, I thought I should write and ask the question, "what would happen if everybody put their stimulus checks into the bank and saved them?!!

Blogs that talk about stimulus checks

• This site talks about what people are doing with their stimulus checks.
  
• What will YOU do with your fiscal stimulus check?
  
• How to Use Your Economic Stimulus Check
  
• Huffington Post - Why You Shouldn't Spend Your Stimulus Check
  
• How Did You Spend Your Stimulus Check?

There are all sorts of blogs talking about all sorts of questions.

I find it amazing that this common receipt of cash is causing such a discussion online. It's common because every body's getting the same amount of money.

It's probably fun to compare how you'll spend it. It talks about the differences in peoples lives and priorities.

WHAT IF THEY ALL SAVED IT?!
What happened if every American who received one of these checks either saved it or paid down a credit card?

This is the point that I've been trying to get across for a while. The governments policy is to have everybody spend, spend, spend. "Put the item on your credit card." "Spending is good for the economy." That's what the government is calling it, and that's why they called it a stimulus check.

If people didn't spend their stimulus checks, would they would be harming the economy?

1. The credit card companies would make millions less in interest payments. If the full $138 billion was put to paying down credit cards, that would be devastating to the credit card companies as follows:
   
   $138,000,000,000 x ( 18.9%/12 ) = $2,173,500,000 in interest payments that the credit card companies wouldn't receive in ONE month.
   
   
2. If everybody saved the $138 Billion:
   $138,000,000,000 x ( 4.75%/12 ) = $546,250,000 in interest paid out in one month.
   On top of that, none of the retailers would make any money on these items, let alone the manufacturers, the distribution chain, the transportation companies , and the foreign manufacturer and distribution plants. (I can imagine that much of this $138 billion is going offshore to foreign manufacturers in China, India etc. )

As one blog mentioned, the government is borrowing the money to pay these stimulus checks... Now the tax payers are paying extra taxes to pay the government interest on these stimulus checks.

It's all a bit ridiculous.


In my opinion, each American should take their stimulus checks, and deposit them into a savings account. This would give many of them the start to their new savings plan. End of story.