Will the Stimulus Actually Stimulate?

With much fanfare, the government is releasing checks from the stimulus package next week, and the big question is what impact will be felt in the flagging economy.

At first glance, it all sounds great. Checks for $300, $600, $1200 arriving for taxpayers so they can go out and get a flat-screen television.

Awesome!

But while I expect some kind of bump in the overall economic situation, I wouldn't count on that many retail spending sprees. At least not as many as the government is hoping for.

Here are some of the reasons for my doubts:

Housing crunch: With the record number of foreclosures, I would expect taxpayers in bad loan situations to try and postpone their fate with banks and mortgage companies. For those in real trouble, the payment is too late to help them. I don't expect them to be at the mall. It's more likely they'll use the check for relocation and/or moving expenses. It is possible their new landlord will be on a shopping spree, after they pay their huge property taxes.

Spastic plastic: Credit card debt in America is soaring. Most taxpayers are carrying way too much debt, and the checks will help them bring down a high balance. One of the lessons I'm seeing here is that when a country lives on credit, a stimulus package will only help them on past purchases, not future shopping. Of course, when they pay down the high cards, I'm sure they'll run them back up with new purchases. Thereby creating more of the same issue we have now. Isn't credit great?

Gas, food, etc.: With prices soaring, I'm sure most consumers will actually fill their gas tank for the first time in recent memory. And with the price of a full shopping cart coming in at around $200, they may have enough to take in a movie. ONE movie! A family of four can go, but it has to be a matinee, and no popcorn, either. We're not rich, you know.