The first stimulus checks are being distributed with great fanfare; as if they had real substance. At best the money, which took us further into debt, will offset a fraction of the damage to individuals from the Fiat Reserve Bank’s [FRB] massive sale of put options to secure their Wall Street patrons.
To gauge the stimulus’ ability to restore a flagging economy - First, click your heels together and pretend that the recipient’s wages have kept pace with the official CPI figures. Then forget their a-historical debt burden and contemporary asset deflation. Finally, do the unpleasant math to calculate the cost of those ever-so-conveniently excluded items of food and energy.
Let’s look at an average family of four as described by the US Department of Agriculture (couple 30-50 with young kids). Their prescribed “liberal” food bill in June of 2007 was $897 per month. It now stands at $975 (compounding the latest figures for 4/08). That’s an annual increase of $936 per family.
The average adult uses 500 gallons of gasoline per year. The cost of unleaded gas in June 2007 stood at $3.13 per gallon. One year later it has risen to $3.93 per gallon. That’s an annual increase of $400 per person or $800 per couple.
If both parents work, the family will receive ($600 + $600 + $300 + $300) = $1,800
While the cost of their non–CPI living has consumed most of it ($936 + $800) = $1,736
How poetic – the answer is: $64!
This rebate will have NO simulative effect as it barely compensates tax-payers for the last 12 months of non-CPI inflation. This accomplishes nothing more than returning to individuals, a diluted share of the buying power they lost in the Sub-prime bail out; a dividend for their magnanimous albeit involuntary investment. Through the Federal Reserve system, we all underwrite the titans of capitalism. This token rebate is an opiate to calm a middle class facing extinction.