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Could the stimulus be stimulating the wrong thing?

Normally at this time in April, procrastinators are scrambling to complete their income tax returns. This is the second time in just two years that Uncle Sam has provided taxpayers extra time to file their returns.

For many, the process is simple and there are software programs to help guide them through it. For others that own businesses or don’t fit the mold for tax software programs it’s a fairly complex and painful ordeal.

I’ve been fortunate in that I have a very good friend who is a CPA. Throughout my entire career, he has held my hand and guided me through the entire filing process for both my individual and corporate returns. He recently shared with me that many of his corporate clients are frustrated because they’re unable to hire enough dependable employees.

Undoubtedly fueled by the pandemic, many are hurting in the pocketbook and in need of financial assistance. On the other hand, there are numerous help wanted signs on businesses up and down the street. Go figure.

I don’t pretend to have an easy solution, but I fear that, in addition to helping those truly in need, the stimulus money might also keep others on the sidelines. Why? Because with money in their pockets they might lack the motivation to seek employment. The one-size-fits-all eligibility for the stimulus checks helps some, but for others it may do more long-term harm than good.

I feel that good work ethics along with money management skills are important for lifelong financial independence. It’s difficult to develop such skills when money is just given away. Free money may help fill an existing financial hole, but it doesn’t help motivate anyone to get out of the house and get a job.

In a way, our nation is similar to one of those large cargo ships that carry thousands of containers. The United States also carries a precious cargo of some 350 million people. And, as with a cargo ship, it’s vital that the cargo is kept safe.

That’s a challenging task at any time. But during a pandemic, it’s especially difficult to keep 350 million people afloat. Nevertheless, the government’s has the responsibility to make sure the cargo; the people of America, eventually get freed from the containment and returned to their normal functions and activities.

Following the analogy, it makes no sense for cargo to sit in a container forever. At some point it has to get out and fulfill its intended function.

Throughout the pandemic, there’s been a premium on safety, and rightfully so. But we need to prepare for life after the pandemic and that means getting people back to work. Failure to do so could definitely result in some very difficult times. We can’t stay in protected containers forever.

I believe our nation desperately needs better financial education. There is so much that people want, and often feel they deserve. But they also need to understand that somebody has to pay for all of those things.

Money may be doled out, but at the end of the day others are hard at work to pay for all the free money.

I may compare our nation to a giant container ship, but I’m confident we can steer through those any turbulent waters without running aground.

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Ken Morris


E-mail your questions to kenmorris@lifetimeplanning.com

 Ken is a registered representative of LPL Financial. Securities and financial planning offered through LPL, a Registered Investment Advisor, member FINRA/SIPC. Ken is Vice-President of the Society for Lifetime Planning in Troy. All opinions expressed are those of Ken Morris. LPL and Society for Lifetime Planning are independent companies. Investing involves risk including loss of principal. No strategy assures success or protects against loss.