Stimulus Gobbled up by Inflation?

The first economic stimulus payments start going out today, a week ahead of schedule. (See the original schedule and subtract one week to find out when yours should come.) But here's a scary economics question: how much will this $160 billion loan from our grandkids stimulate the economy if most of it is gobbled up by inflation? Gas costs 53 cents more per gallon than last year at this time (that was two weeks ago -- probably 60-70 cents more now). Bread is up 14.7%, milk 13.3% from last year...

It's conceivable we could spend every penny of our stimulus checks on the same amount of gas and groceries we were buying last year and not have any left for the splurging that Bush and Congress are counting on. And if I understand the stimulus package correctly, the only way it does any recession-fighting good is if we spend that money like drunken sailors on big expensive items we didn't plan to buy before.

Uh oh -- we may have just sunk ourselves another $160 billion in debt (during wartime, no less) just to tread water. Oops. We should've done like Joel said and sunk the money into mass transit projects.

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Of course, Mrs. Madville Times isn't helping. As stewardship chair, she's encouraging her fellow Lutherans at St. John here in Madison to tithe a portion of their stimulus checks or donate to other organizations. Come on, we're supposed to buy appliances, not help the poor! ;-) Then again, maybe charitable giving is good for the soul and the economy. Seems I recall folks making the argument that lower-income folks will pump that money into the economy faster than higher-income folks. Time for some Lutheran income redistribution?