My Thoughts on Stimulus and the Downstream Impacts

***Disclaimer – This post is not meant to be political. I have neutral views on both the Republican party and the Democratic party. This blog is meant to primarily discuss the impacts of bad economic policy. 

There is a famous meme that most people are familiar with both locally and globally now regarding endless money printing that we are incurring.

Powell – Money Printer Brrr Meme

We do not need to look far to see that everything that feels good, and is good to us, may not be good FOR us. To speak about the manner in an elementary way, candy makes one feel great! One may get a sugar rush and feel happy for a little. In the long run, candy is not good for us – it rots our teeth, can cause blood sugar imbalances and even obesity if not moderated. I look at stimulus as the same thing.

Initially, the stimulus feels great, one looks at their bank account and sees a larger balance. They can now have freedom without having to worry about the typical paycheck to paycheck lifestyle. We can now spend more money on activities that we normally could not! Shopping, traveling, and entertainment is likely where the money goes for many people – and it feels great. Eventually, it will rot our teeth.  

The money printing cannot go on perpetually, and sometime down the road, we are going to have to pay for this money printing. Facing reality and deciding to sober up and stand tall against unsound economic policy will help us in the medium term and long term/ alongside subsequent generations, even though it may be hard to rip that band-aid off initially.

Stimulus Payments Toward Each U.S. Citizen

Nobody wants to be the bad guy and reduce unneeded government programs; nobody wants to be the person that denies free things to those “suffering”. Do not get me wrong, some people are suffering out there who need stimulus, but I think there should be certain standards and requirements one must meet before they are eligible for stimulus. Now, let us discuss the downstream impacts.

There are countless downstream considerations for massive Government Quantitative Easing (QE). First and foremost, the inflation rate for future years is likely to occur. Inflation erodes our purchasing power, and it does not help the lower-income bracket’s economic situation. The second negative impact of this is the reliance on the government for goods and services. Think to yourself, when has the government done anything efficiently, in our best interests, and cost-effectively? With confidence, I can say seldom – that is what the marketplace is good at doing. Another thing to consider is do you want to leave your kids or their grandkids with your bill? It is like racking up a huge bill at a fancy restaurant, ordering lobster, caviar, and wine imported from the south of France, and then leaving someone else sitting at the restaurant to pay for the dinner. They did not make the poor spending decisions, but why do they have to pay for it?

Child Receiving Candy

When you were a child/teen and wanted a toy or a piece of candy and were told no you could not have it, what would you do? How would you get that thing you wanted? Option A – You could cry until you get what you wanted or Option B – You can set up a lemonade stand, sell popcorn or take on a paper route. Option A would condition you to think that the way to get something is to beg and ask, making you reliant on the whims of others and putting one in a reactive state. Option B would set up a fantastic work ethic, ensure one is responsible and develop a value for things, an appreciation per se.

In today’s day and age, many not all of us want free things. They cry in a more sophisticated grown-up way and expect the government to give them free things just because they demand it. We cannot take this approach! We need to be self-reliant and go with Option B in our economic and monetary policy. Will people hit the hard times? Yes, they will, and then and only then should the government come to help them out once determined they are facing hardship. The easy option is to always give handouts, the easy option is to cave into the crying child – there needs to be a better solution.

Off at Sea – Free

It is an exciting time to be alive, and I think there are many benefits to money printing, but I think it needs to occur on an as-needed basis. We as individuals need to send letters to our elected officials and lead without a title on policy matters. Both Biden and Trump promise great things, but at the end of the day, your success is up to you. A $1,200, $1,400, $2,000 check or above will not crack your passion. It will not bring you financial freedom, it will not create prosperity. It is a little push that can get you through a rough time (if you are going through one), and that is it. Position yourself in the best way possible so one day you will not need stimulus and you can be fully independent of the policy considerations in Washington D.C.  

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