The value of the government’s $168 billion economic stimulus package may be more evident in the psychological boost it gives U.S. consumers than in the actual dollar impact it makes on the economy, says Raymond James’ Senior Vice President of Wealth Solutions Chip Bauder. If it is spent the way the government hopes, it would be the “third largest retail event after Christmas and back-to-school shopping.” On the other hand, if large numbers of recipients use the money to pay bills and add to their investment portfolios, the government “wouldn’t get the consumer impact it’s hoping for,” Bauder says in this edition of Professionally Speaking, hosted by Larry Pugliese.

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Whether the economic stimulus package will create the desired wealth effect – making consumers feel a little bit richer and spending accordingly – can be determined only in hindsight. Economists doubted a similar effort in 2001, but it worked. This time it may not be such a great success, however, if half the $300 or $600 that “ordinary taxpayers” have received or soon will receive goes into their gas tanks. In this edition of Professionally Speaking, hosted by Larry Pugliese, Raymond James’ Senior Vice President of Wealth Solutions Chip Bauder offers details on how to obtain the payment, how the economic boost is supposed to work and why this is not a taxable event.

You can access this audio presentation by visiting the Raymond James website at raymondjames.com/experts/bauder.htm. To listen, you may have to download QuickTime, Windows Media Player or Real Player. This software is free and the download, available in the Professionally Speaking section of our website, should take only a few minutes.

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