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By PEG HICKS-MOORE

Robbing Peter to Pay Paul

Posted 1:40 p.m., January 29, 2008

Americans are borrowing heavily to get whatever we want. Houses, for example. We all want to be a part of the American Dream, so we cast our fears to the winds, sign on the dotted line, and then are dismayed when we can’t make the payments. Whether you are a credit risk or not, the lenders delight in closing the deal, as their companies will quickly turn and sell the loan to another entity, making a tidy profit.

We want the new, big, flat screen TV. Just charge it! Look at all the card offers the letter carrier brings – you have been chosen to receive their latest and greatest card, with no finance fees for a while (and don’t bother with the small print either!) Come on down and claim your prize!

The United States government has the same mentality. The checking account is overdrawn. So, borrow more! We take billions of dollars from the Chinese and others to shore up the account, even though we know we have to write huge payments for the war in Iraq with no final payment ever in sight. Our economy is flat lining. What to do?

Here’s an idea! Write checks to American taxpayers for more than $150 billion dollars, divide it up amongst 117 million families, and give everybody around $600. Then, tell them to go spend it on stuff, to help grow the economy. Give businesses some money too; say $50 billion more, so they will buy more stuff, like equipment, or a bigger building to put their stuff in.

This is called a “stimulus package.” I call it robbing Peter to pay Paul. To me, this is the dumbest idea I have ever heard. $600 doesn’t go far, and one of the reasons for our personal financial failures is that as a nation of spenders, we do not save enough. Not for retirement, not for medical expenses, not for emergencies, not for our children’s educational futures. My parents never gave me a chunk of change and said, “Have at it! You are helping to bolster the economy!” My parents had lived through the Great Depression. Giving us money and telling us to spend it on “whatever” will not make our current money woes decrease nor help the general economy in any discernable way either.

Some legislators thought that this wasn’t the only way to make our economy better, but they did buy into the idea more than half way, which to me is still unforgivable. After hearing from those who represent the unemployed (who would not get a check in the mail) and seniors on Social Security (also nixed as non-wage earners) they said “Let’s reduce the individual checks to $500 and extend benefits to the unemployed and seniors!” The Bush Administration cried, “Foul!” “Leave our stimulants alone, the individual check is enough,” they responded this week.

My advice? Whatever the final “stimulus package” will be, when that check comes (if you qualify), cash it. Who knows, it may bounce if you set it aside too long. Don’t spend it on something frivolous. Take the cash and put it in a savings account and forget about it. I know the interest you will earn is probably less than inflation, but the original amount, plus a little more, will be there when you truly need it most, and may provide a little relief to your personal financial woes. It’s not what your government wants you to do, but “saving for a rainy day” is what your Mother would tell you to do.