Independent, Fee-Only Financial Advisor
Thursday, September 08, 2011
The idea behind getting the economy back to a roar is getting money flowing around. Simple enough right? The Fed printed money for a while, giving it to the government nearly free and encouraging banks to pass it around too. Stimulus projects spend large chunks of money in various places, spending money on everything from asphalt and machinery for the projects to lunches and clothes for the workers.
The payroll tax has been cut, putting a few more pennies in everyones paycheck. This is just a little bit of stimulus, a little immediate money to spend. For some this will be the little extra that they can get by on, for others, a little more to save or invest. Currently this tax cut is dripping a little bit of money into the economy, keeping the cut will keep that little drip going.
Posted by Ryder Taff, CFA