<< Back to all Blogs
Login or Create your own free blog
Layout:
Home > Some thoughts about $800/$1600 payment

Some thoughts about $800/$1600 payment

January 22nd, 2008 at 11:29 pm

I heard about the $800/$1600 payment from the government, and it reminded me so much of what I had experienced in Japan when their economy tanked in early 90's. It was a very similar situation. Real estate price went crazy in mid 80's, and people were buying real estate left and right. Banks loaned money to anybody and everybody. After that, there was a huge bad debt which banks had to deal with, and the government was trying so hard to re-bump the economy.

They did similar things. Lower interest rate. Yap. Japanese prime rate has been so low, my friends' mortgage rate is 2 to 3%. Yes, 2 to 3%. Keep in mind, interest rate for savings is like, 0.1%. My friend who moved to Bay Area a couple of years ago told me he was shocked to see "interest" in his bank statement that he hadn't seen for years.

Giving people money? Yap, done that too. The government paid about $200 per child, and I received $200 check for nothing. My friend has 4 kids, so she received about $800. Did it energize the economy? Of course, not LOL Their economy still hasn't fully recovered today.

I know we cannot conduct a simple comparison between US and Japan economy because I think US economy is much more flexible and dynamic. But I think it is interesting to see some similarities in economic downturn

Posted in Every day life | 7 Comments »

7 Responses to “Some thoughts about $800/$1600 payment”

  1. denisentexas Says:
    January 22nd, 2008 at 11:39 pm 1201045165
    1201045165

    I'm one of the fence sitters on this issue. I don't know enough about economics to form a firm and well educated opinion. I understand the concept - give people money and they'll spend it, energizing our sluggish economy. But if I got the money I more than likely would save it rather than spend it. Most of the people I've talked to about this say the same thing. So, I get the feeling that while the concept might seem good, the possibility exists that it won't do what's needed. I don't know..it's a quandary for me.

  2. nance Says:
    January 22nd, 2008 at 11:45 pm 1201045550
    1201045550

    I think it would make our huge deficit even more impossible to deal with, and people would probably use it to pay toward debt, in most cases. I think it is a bad idea. Sure, I'd like to receive "free" money, but it isn't FREE!

  3. Ralph Says:
    January 22nd, 2008 at 11:56 pm 1201046184
    1201046184

    I've just been thinking that all of us who are already in the hole just can't afford to stimulate the economy - we've already (over)done that! So we may be in for a recession as we try to dig out of debt out of necessity.

  4. denisentexas Says:
    January 23rd, 2008 at 12:10 am 1201047041
    1201047041

    Nance, that's true. It isn't free and sooner or later it will catch up with us.

    Ralph, good point that some of us can't afford to stimulate the economy. I know I can't!

  5. TheWalrus Says:
    January 23rd, 2008 at 01:45 am 1201052721
    1201052721

    Japan also had a much more overheated real estate bubble. Remember that at one point, the land under the imperial palace was worth more than the entire state of California.

    Our bubble is not as bad but it still has to burst...

    Giving away free money isn't the solution. That's what got us in trouble last time!!

    www.thewalrus.biz

  6. newman Says:
    January 23rd, 2008 at 04:43 pm 1201106625
    1201106625

    For the thousands and thousands of dollars that I've paid into social security and will never see . . . I say . . . GIVE ME ALL THE MONEY YOU CAN NOW . . . please!!!

  7. Broken Arrow Says:
    January 23rd, 2008 at 05:54 pm 1201110880
    1201110880

    I may not be an economist, but I know that this rebate is meant to give people more money to spend on things. That way, it helps to keep our consumer economy going. My question then, is this:

    Why is the government, already stretched out financially, giving its own people a rebate it can't afford? Why are they trying to stimulate the economy by giving people more money to spend? Why are we even trying to sustain a comatose a consumer economy?

    In my opinion, the economy needs to go ahead and correct itself, and consumers should do the same by learning to spend responsibly.

Leave a Reply

(Note: If you were logged in, we could automatically fill in these fields for you.)
*
Will not be published.
   

* Please spell out the number 4.  [ Why? ]

vB Code: You can use these tags: [b] [i] [u] [url] [email]