I'm getting stimulated

Last week, I mailed off my Federal tax return, sort of. It was an abbreviated 1040A, intended only to elicit my "Stimulus Payment" from our beneficent government. It marks the first time I've ever filed a tax return before the 2nd week of April. Since my income is paltry, I would not otherwise be required to file. Surprisingly, the IRS mailed a special packet to me just so I could make that filing. I'm impressed. I had checked online, and knew I had to file in order to receive the "stimulus", and was wavering whether it was worth the effort of a normal 1040A to receive $300. After spending untold weeks wrangling with my own income tax returns over a period of 40 years of so, being able to bypass that annual annoyance is one of the best benefits of living poor. April is now one of the best months of the year, the core month of glorious spring rather than the month of stressful, often painful, tax filing.

However, the special mailing from the IRS was, I'm amazed to have to admit, was not only convenient but understandable and easy. Would that filing was that easy for the rest of you. Like many of you, I became adept at filing taxes, and at minimizing payments or maximizing refunds. One year, long ago, I managed to get money back after having paid none in during the year. No, it wasn't supposed to work that way, but it did. It involved the Earned Income Credit. At the time, I had children at home and low self-employment income for the year. I did my usual first-try at calculating for my return, with no business deductions... just to see how bad it was going to be. Then I went through it again with some business deductions, and it came out costing me more! Whoa! How could that be? My curiosity seriously aroused, I analyzed the tax tables and the Earned Income Credit tables, and determined that the EIC table was strange... there was a maximum benefit, but NOT at the lowest taxable income, as one might expect. To reach the maximum EIC benefit, I had to RAISE my taxable income. By eliminating legitimate deductions, I maximized my use of the EIC, and got a "refund" of what I hadn't paid in.

Later, in a phone conversation with an IRS auditor, I explained that peculiar return. She was aware that it was possible, and legal, but told me that she thought it was still "wrong" to take advantage of it. I just smiled to myself.

So... presumably, I'll be receiving $300 from the IRS one day soon. Ah, but there's the rub, isn't it? The money isn't from the IRS, or even from the federal government. The truth is that my $300 (and yours) will undoubtedly just get added to the national debt. Wouldn't it be nice to try to use that same convoluted argument with our credit card companies... "I'm not paying my bill... I've used that money to patriotically stimulate the economy, so you really should just erase my debt from your records."

Sure, the stimulus payments are more government "magic money". They taketh, and sometimes they giveth some back. Will these payments stimulate the economy? No more than any debt will. Sure, more money will be spent, but the piper must be paid. The government will borrow more money without reducing any other spending. The Japanese, Chinese, and who knows who else, will buy up a little more of the U.S., and our dollar will degrade proportionally.

One of the few foreign currencies I've ever exchanged dollars for was long ago, in Japan. In 1960, one could get 360 Japanese yen for an American dollar. Today, the dollar is worth about 100 yen. Until recently, most people around the world still wanted American dollars. Today the preferred currency is the Euro. That preference is an indicator of confidence in the currency. All my life, Canadian money was worth less than ours. Today, it's worth slightly more than ours. Somewhere, I have a wooden nickel from some old centennial celebration. It may be worth more now than American currency.

A "stimulus" is something that "incites or rouses to action". Like almost all government actions, the Stimulus won't work to stimulate the economy, but it will make many people temporarily happy to have extra cash. Few will understand that it will be just one more economic boondoggle designed to distract us from many decades of government selling our nation down the river.