Is the so-called economic "stimulus" plan going to backfire on Americans?

Question

The U.S. government approved an economic stimulus package giving individuals up to an additional $600 if they qualify. However, business owners know that many people are anticipating this extra money, and it appears they are looking to suck up as much of it as possible by indiscriminately raising retail prices. I watched the cost of flour skyrocket from $1.39 to $2.69 in less than two months at a local grocery chain. Clothing is also curiously more expensive for the same brands you saw last year at this time.The real "stimulus" for retailers is to hike prices in the name of maximizing profit. Business owners think people will be willing to pay the higher prices because "extra" spending money is on the way. This means the money consumers get will not go as far as $600 might have gotten you in the absence of a "stimulus" plan. Hence, the only ones who stand to truly benefit are the business owners UNLESS consumers can spend wisely and not buy these items suddenly priced through the roof.

Answer 1

Supposing that you are right, are you willing to oppose it at this point?

I can't speak for anyone else, but I have plans for my check.

Answer 2

I certainly hope not, but it looks like it just might. I really hate it when retailers, business owners, restauranteurs etc make excuses for rising prices like what you've described.  To me, that kind of c**p just doesn't cut it.  I remember when my state increased it's minimum wage, and I had went to a fast food restaurant where they charged for a glass of tap water!  The excuse? The woman snaps "minimum wage went up!"  HUMPH.  So we're supposed to keep overworking and underpaying people just to have cheap items. Crazy, huh?

Answer 3

Those costs are not because of the stimulus checks. They are the higher fuel costs in getting those goods to market. Diesel fuel is near $4/gallon now. That is being passed on to the consumer.

Answer 4

The retailers are not raising the prices because of the stimulus. It is inflation and the weakening dollar that are fueling price increases. It's increasing the price of everything, particularly gasoline. High gas prices mean that shipping food and all goods to market is costing more to manufacturers, who pass on the fuel surcharge to retailers, who pass it on to customers (and sometimes investors).

Incidentally some independent contract truckers who bid on certain jobs long ago are finding that the high cost of gasoline means that they are actually taking losses. Didn' t you see the convoys of truckers driving slow on the interstate highways lately in protest of high fuel prices? (Not that this protest is likely to help them out.)

Another reason for high food prices is the biofuel debacle. More farmers are devoting more land to corn as the price of corn is going up too, and it's more profitable for them. That equals less of a supply of other grains like wheat.

You are making a mistake to think that business owners all across the country have conspired to increase the price of certain things. That is too large a conspiracy to sustain. These are market forces at work, not the greed of business owners.

Answer 5

Yes.  We borrowed the money from CHINA!!!  It is ridiculous.  If we do not change the dollar to the gold standard then the inflation will keep getting that much higher and higher!  The government will just keep printing more money and the dollar will continue to drop and prices will continue to skyrocket!  It is an unintelligent bandaid on a leg that got cut off in a car accident!

Answer 6

The cost of flour skyrocketed because of the cost of diesel.* Trucks get 7 miles to a gallon.** Fuel has skyrocketed. The cost of getting the flour to you has skyrocketed.

Backfire? I don't know.  It's a short term solution.  I understand the idea, but it doesn't really address the real problems.

And back to that cost of flour. Farmers growing the wheat use equipment that burns diesel. They take it to the grainery by diesel. They ship it using diesel over and over to get it to you. Even the paper bag it's put in is made of trees taken to mills by diesel burning trucks and then all the other things that go into making paper are brought there by diesel burning trucks. Then they are shipped to the flour mills by diesel burning trucks.

The price of diesel effects your life far more than the price of gasoline!!!!!!!

Notice where those clothes were made? Read the labels? We import A LOT of goods in the US.(Did you know the 'red bull' beverage is made in Europe?)  And the cost of getting those goods to us over that long of a distance has increased.

The value of the dollar has fallen. They are spending more American dollars to bring those same items into the country.

And, as far as that $600 goes... I paid this money in once. It's going to count as income again when I file my taxes next year. I'm going to have to pay it in again. It's basically a year loan from the government that can't afford to give me a loan. And I'm paying for all the extra paperwork to do this!

Answer 7

No I do not think that will stimulate anything, I know of quite a few people, that if they are going to get it, they are going to pay bills and such.  My wife and I are going to put it back into our fund for the roof on our house, after the government takes from me to pay taxes, which brings me to another point, why would they give that back to me, I feel I need to become a citizen of Canada, or something like that.  Why in the world would uncle SAM take from me just to give it back?  We are wasting more on false hopes than anything else, I for one and several others have lost hope in this country, it is costing more in paperwork and wasting more in natural resources to print and send checks to the masses than it would to Say "here you owe taxes this year, have it back and we can call it even".  Not to mention your costs rising ridiculously how about the cost of energy, hmmmmm , clothe4s and flour are great, but you need energy to see to wear and or make something out of your flour.  Alot of people are probably going to save that check so they can do something with their families this summer, at least afford fuel to go places.

Answer 8

It's supposed to give back more money that we've worked for for us to spend. when people have more money to spend they'll spend it. that stimulates the economy. it probably won't backfore. it may help.

Answer 9

They're doing this stimulus package in hopes of boosting the economy.  They figure that people will take that money and go spend it on stuff that isn't really needed.  In reality, I don't think this is going to be the case.  Things have been soooooo bad lately.  People have been seriously cutting back on things.  Don't you think most people will use this money to catch up on some bills, or put it away for when they need it, or I don't know, spend it on gas, with the prices being so EXTREME!  A lot of people have been losing their jobs, or their hours have been cut.  These people are not going to take this money and go on a shopping spree or something.  So, I don't really know what this is going to do to the economy, but shoot, I"ll take the extra money!  I know I sure can use it right about now!