Wednesday, April 29, 2009

Retiree Stimulus: It's Later Than You Think

Those economic stimulus payouts are really very cleverly designed, aren't they? The idea is that the recipients of the payouts--the latest being the 50 million retirees who will receive $250.00 each--will blow the money right back in the economy's direction. In the case of the retiree payouts, the anticipated windfall to the economy is in the neighborhood of 13 billion dollars. Thirteen billion dollars is a whopping sum by anyone's estimate, but taken in individual $250.00 units it seems little more than mad money, and mad money is, by definition, money used impulsively. In today's sour economy, that impulse is probably to pay off debt and to eat. What it isn't is substantial enough to do much of anything else with. It's just enough to spend without guilt or to buy 20 six-packs of beer but not enough to save Detroit or to buy a condo in one of those developments that are the empty concrete sentinels of the Florida coastline. That's not the point. It is enough to toss something towards an overdue bill or to toss 35 Hooverish chickens into a pot, stuffing and green bean casserole aside.

What would happen if those recipients who were born before 1940 stuck the $250.00 under the mattress? That would be a bit more than five million dollars that didn't go back into the economy. Somewhere around 20 million of the recipients are the children of the Depression. Had their parents received a similar payout, it would have been in the neighborhood of sixteen dollars apiece, which doesn't seem like much today, but it was and is enough to stop someone from starving for a few months if one is a conservative eater. That still helps the economy, whereas tossing it into a tin can in the closet does not. According to prevailing economic theory, those in the worst shape spend and those with assumed financial flexibility provided by a job do not.

The deputy administrator of the Social Security Administration, Mary Glenn-Croft, equated helping the economy with the beneficiaries getting an assist with daily living expenses. How dull that sounds. It sounds much more exciting to help the economy by luxuriating in the good things in life rather than by buying blood pressure medication. Seniors are now the designated spenders. The economy is hurting, bleeding, dying, withering; it is bruised, battered, agonized, and aching. Seniors, consider yourselves hired: It is now your job to provide relief.

At last reckoning and despite metaphoric efforts to the contrary, the economy isn't mortal. It can't go blind, walk with a limp, or, for that matter, die. It doesn't take risks even as people take great risks with it. The retirees parked on the edge of mortality are encouraged, by means of incitement to spend, not to save. And why should they? The lethargy of saving is a luxury for the young, young being anyone who is not yet "retirement age" and who has not yet been laid off.

This is what we have come to. Our youngers have failed us. They didn't spend. They didn't make use of that extra few bucks in their weekly paycheck. We are now asking people who may have distant memories of a very difficult era in American economic history to spend governmental mad money on the silly pursuits of normal living expenses, until the money runs out. Buy those frivolous chickens, throw in some celery, enjoy yourself on the banality of glaucoma medication; the message is that it's later than you think.

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