To listen to an audio of this article and find other articles by this author, visit: theinspiringrevolutionsblog.blogspot.com When a Stimulus Burns Out Written on April 26, 2008 When you ignite a car, there is a quick electric spark that starts the engine. But the activity that comes from the spark won’t last long if there is no fuel to burn. The spark doesn’t run the car. It only gets the car running. Similarly, anything that wants to live, grow, and thrive over time needs a consistent source of energy. It needs to move beyond immediate gratification into persevering progress. From this basic understanding of life, we can realistically evaluate the benefits and limits of the economic stimulus package. The purpose of the rebate checks that the government will begin sending out next week is to stimulate the economy. But the economic stimulus package is like the ignition of a car or the match that lights a candle. It can spark the economy (and just in time for the grand exit of President Bush… hmmm… interesting timing I must say), but the economy will only continue to burn if it has all the resources it needs. And right now, more and more parts of our nation are increasingly closer to being all tapped out. If we want to save our economy from descending into a severe recession (or worse), the kind of change that we need is much more fundamental than a stimulus package, which is like a quick jolt of sugar that gives you a temporary high, a fleeting pick-me-up that masks the approaching collapse into exhaustion. It certainly cannot change the overall economic trend that is currently contracting sharply into a dangerous downward spiral. This is not to say that it won’t accomplish something positive. There are people struggling to meet their most basic needs of food, health, and home. And so, that money is definitely of urgent need for some. But the promise that it will “boost the economy” is a typical missing of the point by an administration that seems to have no sense of the individuals that make up this nation. A rise in GDP is not good for everyone unless it improves the lives of everyone. Anyone can boost the numbers to look good. But that’s just a façade – to pull out a little cliché: it’s what’s on the inside that counts. So other than helping people in urgent need, what will this stimulus do? Well first we must know where the money is coming from. We are already running a deficit, so this will only increase our debt more. We can pay for it through taxes, which would have to come from the wealthy, otherwise it would be taking right back from the people it was given to, and it will more than likely put them right in the same place they were before. Or it can be added to the tab of our debt, which would increase the interest we pay on that debt and would increase the acceleration of our economic downfall. The other possibility is that it would go toward creating products that we could then sell outside of our nation. That would help us pay back the amount of our rebate checks and perhaps a portion of our debt. But that scenario is highly unlikely to happen. Why? Because people need to pay off their own debts and buy basic needs right now. The money is much more likely to go to banks to pay off home loans and to companies that supply basic needs, such as food, water, gas, electricity, rent, and other regular bills. And what will these companies do with this money? We would hope that they would hire more employees, pay their employees more, or make investments that might trigger other companies to hire employees or pay current employees more. But with consumers increasingly cutting back their purchases, businesses will be more likely to pay off debt or pad their reserves for security during this economic contraction. And banks are likely to do the same. They have so much unrecovered debt on their books that they will probably keep the money to increase their reserves. So based on the current economic situation, the most likely path of this stimulus money is that it will go first to the people who, more or less, urgently need it so that they can get by for a little longer. Then, it will go to companies that will either use it to remedy their own financial problems or keep it for their own future security. In the process, it will increase our nation’s debt, which adds to the source of our financial issues and accelerates the downward spiral it was hoping to correct. Be clear that I am not necessarily advocating against the stimulus package (because I do believe in helping those in need). I am simply pointing out its limits. I am bringing attention to the fact this policy and others that are being used, such as the mortgage bailout, do not treat our economic problems at their source. The problem is in our psychology and philosophy. It is in our motivations and principles. These are the driving forces that move our individual and collective actions. And when we don’t tend to them, we are certain to repeat the same patterns over and over again until our lives dissolve into oblivion, at which point society’s structure collapses, and we start our “do over.” This is the problem with consistent short-term thinking. It becomes a bunch of Band-Aid solutions that never get to the root of the real causes of the problem. So if we don’t do something serious in addition to the stimulus package, if we don’t provide a way for people to consistently earn a living that promotes growth (like the fuel that is needed to drive a car to places that are beyond its current situation), then we are only going to experience a little window dressing that simply delays the inevitable crash of our economy and makes the crash worse that it would have been before. It doesn’t have to be that way. Delaying the fall exacerbates the fall, and I believe that We the People are ready to rise up instead. (This article is meant to be a realistic, critical analysis of policy rather than a solution-oriented source of viable alternatives. The reader can hopefully use the problems highlighted in the article to come up with their own solutions that would remedy our national problems. For more information on what is needed to turn our economy around, you will discover more in my book, Thriving at the Brink of Disaster, at: www.inspiringrevolutions.com/thriving.php) To begin applying these ideas to your life, answer the questions below: - When in your life have you faced an approaching crisis and focused only on the short-term solution to get you out of the rut? - Did you ever treat the source of the problem? If not, did the problem arise again in some other way? If it did, what can you do now to discover the source of the problem and make the appropriate changes? - Where in your life do you rely on short-terms actions and quick pick-me-ups instead of long-term strategy and lifelong principles? - In what areas of your life do you take more than you give (physically, emotionally, or mentally)? What are the consequences of these “debts?” - Do you let these debts increase until you hit a crisis, or do you learn from them earlier and change in more profound ways than a simple “stimulus” action? - What are your primary motivations in situations where you incur debts and where you have to keep bailing yourself out? What are the principles behind these motivations? - How can you change or add to these motivations and principles in order to balance your life out and become more stable in the long-term? What has been preventing you from making these kinds of changes and what can you do differently now?