What to do with a $1,200 “check” from Uncle Sam? Why, invest it, of course.
Stimulus checks have been tried before. The idea is, during times of economic stress, money placed in the pocket of the consumer will spark demand as money is recirculated into the economy. Dolly Levi, the matchmaker in Hello, Dolly! expressed the sentiment well when she declared: “Money, pardon the expression, is like manure. It’s not worth a thing unless it’s spread around, encouraging young things to grow.”
However, my good friend, Dr. Arthur B. Laffer, who knows a few things about economics, disagrees. “There is no tooth fairy,” Laffer writes. “Every dollar given to someone comes from someone else.” His point is that the government can’t create resources, it can only transfer them from one person to another.
So, if the government sends a $1,200 check to individuals and $2,400 to married couples, the government needs to borrow that money from someone else, creating a future liability for taxpayers who, after all, fund the government.