Did the stimulus checks do anything positive for the economy?

Question

Did the stimulus checks do anything positive for the economy?

Answer 1

walmart stock went up for about a week before plunging again othere than that .......i didnt see anything

Answer 2

Intel 2Q profit jumps 25 percent, beats estimates - AP - Tue 6:42 pm ET

CSX profit up 19 percent on demand for coal, grain

Apple did in three days what took the original iPhone 74 days to achieve.

Yeah, seems like the money is working.

Answer 3

I guess it depends on what you mean by "positive."  The p**n industry seems to be pretty happy!

http://news.yahoo.com/s/usnw/20080702/pl...

On a serious note, Fed Chairman Bernanke today commented that the stimulus checks seemed to be working, but the effect can only be short term (which is not necessarily a bad thing...)  Long term economic growth is driven purely by productivity and innovation.

Answer 4

The theory of the stimulus checks was that people would go out and spend the money they received.  The assumption was that people would view this as "free money" and run out and spend it, thus stimulating the economy.  

This flies in the face of classical economic theory, which says that if people receive funds from the government that they know they will eventually pay for, their spending patterns will not change, since they have to pay back the tax reduction at some point.  

Some policymakers contend that "deficits don't matter" because the deficit doesn't impact the economy.  This is generally not correct, since with the deficit absorbing more of the amount available for borrowing, it forces the interest on other debt up in order to attract investment, thus reducing the equilibrium amount of investment available in the private sector.  It is only true that a stimulus will have an expansionary effect if it is unexpected and the public does not believe it will impact the overall level of debt due later.

So, no, there is no free lunch, and if the government gives you more money now, they eventually have to extract it from you later.  So the stimulus checks shouldn't do anything for the economy in the long term, and the only impact will only be for those people who don't look forward into the future.