Stimulus 'Cash for Anything': When Money Isn't Free

By Mike Conlon

First Clunkers. Now refrigerators. And I love Peter Schiff’s “modest proposal” of Dough for Dumps. But where will it end? In the latest round of government intelligence, it has been determined that the appliance makers are the next group that deserve to make more money by the powers that be. Should tax-paying citizens be concerned?

One of the major problems with all of this government “stimulus” is that it is taking the decision-making process out of the hands of individuals and putting it in the hands of elected officials. Why? To keep up unrealistic spending patterns to support businesses. Now don’t get me wrong, I’m all for supporting business, but the government is going about this the wrong way. This is boarder-line socialism! And it will have very negative consequences for the U.S. economy and for companies who "benefit" from these programs. Here’s why:

First, by providing all of these rebates, potential customers have now become accustomed to receiving government hand-outs and soon it will get to the point where people will not buy large ticket items unless they think they are getting some sort of government deal.

So what’s going to happen when the music stops and the “free money” ends? It’s going to go right back to business as usual again, consumers won’t be spending money they don’t have and the temporary gains received by these companies will all but disappear.

So I could sit here and try to tell you that you should buy companies like General Electric (GE), Whirlpool (WHR), Sears (SHLD), Best Buy (BBY), etc., as they will benefit from these government hand-outs, but that would be contrary to fundamental sanity. The cash for refrigerators program is for “only” 300 million dollars, so the impact will not be that great. So use caution if you are going to buy these stocks based on this program.

But what’s even worse about these programs is that they are being promoted as “good for the environment” because they promote energy efficiency. Well, if I want to become more “green”, I’ll hold onto my dollars until I can afford to buy what I want!

So why can’t the government give me an individual tax break for “going green” and reward me for making the right decisions? Why do all other citizens have to bear the tax burden of my decision to upgrade myself? I can assure you I won’t be sharing my electricity savings with you.

The short answer is because that would take the control away from the bureaucrats and allow citizens to become less dependent on them. Why not just make “permanent” tax credits for taking steps to become more efficient so that people could upgrade to these products when they felt financially secure?

At the end of the day, we are ALL paying now through the expenditure of our tax dollars to go green even though the majority of us are still using the same old stuff. I thought one of the goals of being environmentally responsible was to recycle products?

My grandfather who lived through the great depression, used to say, “Why should I buy a new television? This one works just fine.” It’s a shame how quickly we forget the past.

So if you’re in the market for a new refrigerator you’re in luck, by all means take advantage of the free money. But bear in mind that the money isn’t actually free, and that you’ve already unwittingly paid for someone else’s new house or car.

Original article

Comments

[Boxed Merlot:]

Most likely these new purchases will encumber new consumers with addditional debt as the balance of the purchase will be borrowed like the C4C program successfully achieved. The following comment earlier gives ominous warnig to any willing to take the leap and further encumber their / our future.
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Zero Hedge
by Anonymous
on Sun, 08/09/2009 - 09:06
#30833
…All told, however, let's consider our current state of affairs. The primary issue is the increase of the money supply into a deflationary environment. This, in itself, is a "good" thing, though Keynes' called it "pushing on a string". It could have little or no effect. Or it could. And if it does, what would that effect be? Well, for one thing the effect is inflationary...because avoiding inflation is all about timing and supply management. Yet since there are so many sources of money supply out there (bonds, currency, etc.), you can't manage them all. Indeed, the issuance of stock is a money supply which is NOT managed by the Fed…
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This is precisely the reason our banks are ratcheting up interest rates on credit card debt and other consumer credit debt vehicles even though they have near zero interest rates from the Fed themselves. They are only trying to preserve their future when the hyperinflation inevitably occurs and they’re left holding the bag. It looks to me they’re hoping against hope there will still be some citizens with a conscience willing to service this exuberant encumbrance.

Aug 25 11:27 PM

[scorp99cam:]

"So why can’t the government give me an individual tax break for “going green” and reward me for making the right decisions? Why do all other citizens have to bear the tax burden of my decision to upgrade myself?"
Tax credits are subsidies too, someone always pays, nothing is free

Aug 26 01:51 AM

[winnersdon'...:]

It appears the Administration regards brand new durable goods in everyone's castle to be more "digestible" to the far left base than a true economic stimulus in the form of tax cuts for the 60% of Americans who actually do pay the tab.

Prepare yourself for the "double dip", and i don't mean ice cream.

Aug 26 06:39 AM

[Mark VH:]

Sorry to have to disagree with you, but most Americans think short term and need the government to help them make the "right" decisions. I bought a power meter and tested my old fridge. It used TEN TIMES the power of a new unit. So I bought a new refrigerator. The money I save will enable me to buy other big ticket items in the future. I converted my house from incandescent bulbs to fluorescent bulbs to LED bulbs. At Christmas, my tree uses 5 percent of the electricity I used to use to light it. But most Americans still buy tungsten bulbs because they cost less. I am so sick of extremists calling this administration "Socialist". Ooooh big scare word! The government isn't making anyone buy anything. These are just incentives, the same as the coupons you get in the newspaper. When Ford offers no-interest financing, is that making people buy? When General Mills gives out cereal coupons, is that making you buy?

As for "making all the other citizens share your tax burdon", I guess you don't want a mortgage interest deduction, or a dependent tax credit either right? I have no kids, but I have to pay for schools. Under your theory, I shouldn't have to. C'mon Mike, stop with the scare tactics!

Aug 28 12:45 PM