Estimated read time: 3-4 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
(AP Photo/Susan Walsh)
Keith McCord reporting
Those economic stimulus checks from the federal government started going out this week. If you filed your income taxes electronically, you may have already received yours in your checking account. Paper checks will be sent out in weekly increments through early July.
So what are you going to do with your money? Americans have a lot of choices on what to do with this money. The question is: Will it really help to stimulate the economy as the president hopes? We asked a couple of experts today.
Regardless of the amount, it's nice to get a little bit of free money. But does the economy really rev up if we pay off a credit card, or do we have to go out and buy a new TV?
There's really no right or wrong way to spend it. "There's really not, there's really not. If you look at it, no matter what happens, it's going to have a positive impact on the economy," said Jason Stoddard, district retail leader for Key Bank. "Whether you save it, at some point, that money is going to be spent."
This may seem like just a one-time injection into the economy, but some experts believe there will be "domino effect." Whether it's spent now or later, the money will still circulate from bank to bank, restaurant to restaurant, gas station to gas station. "Anytime you can increase consumer spending, it helps the economy, helps businesses. The flow of money gets going, so it will help," Stoddard said.
This isn't our first economic stimulus package. Several presidents have approved them during the past couple of decades. The last one was in 2001.
Certified financial planner Thom Hall is of the opinion that these checks won't be a quick fix. "I think it sounds like we're doing something really useful during an election year, but the result is it hasn't produced those results in the past," he said.
Besides the financial aspect of all this, there's also an emotional factor. Spending money makes us feel good. So we'll keep spending! "That's one of the good things about it. Emotionally, it's makes people feel a lot better. It's money that, two months ago, that we weren't even anticipating getting, and now it's a free check for us, if you will," Stoddard said.
"I think that's probably going to be the biggest value that we'll see out of this, is that there will be a sense that there's some extra money and that people will fell more free to go out and spend," Hall said.
By the way, these checks will not be counted as income, and therefore, we will not have to pay any income tax on them next year. For more information on the checks, click the related link.
And just for fun, here's one way to look at deciding how to use your IRS stimulus check:
1. If we spend that money at Wal-Mart, all the money will go to China.
- If we spend it on gasoline, it will go to the Arabs.
- If we purchase a computer, it will go to India.
- If we purchase fruit and vegetables, it will go to Mexico, Honduras and Guatemala.
- If we purchase a good car, it will go to Japan.
- If we purchase useless stuff, it will go to Taiwan and none of it will help the American economy.
To ‘stimulate' the economy, keep that money here in America. Shop yard sales!
E-mail: kmccord@ksl.com
