Tuesday, June 10, 2008
Stimulus checks do little to boost bottomline.
|We live in a region that is glorified by the media as a place where the economic sun is always shining, everyone surfs, kids don’t need to worry about jobs, and housewives are anything but desperate. But anyone who looks past the “TV Reality” smokescreen to see the real O.C., knows that we are feeling the reality burn from the economic downturn just as much as the rest of the country.
While many wait patiently by their mailboxes, or check their checking account balance online every day for that much-needed and anticipated stimulus check, in truth, these checks are only enough to fill the gas tank for their SUV a couple of times. That’s, if you qualify for a check.
Still it’s only a nominal attempt to jump-start the economy. While food and fuel prices soar, the benefits of the extra cash are gone before it stimulates anything. The only businesses seeing the impact of the stimulus checks are oil companies, discount, and bargain stores. The mid- to high-end stores continue to see declining sales. In the month of May, Wal-Mart’s sales increased by 4.4% and Costco by 5%, while the Gap experienced a 14% plunge and Old Navy, a devastating 25%.
Even Orange County’s trendy consumers are beginning to cover the necessities in life first, as they try to make their shrinking dollar stretch, thinking twice about spending their money on clothes or luxuries. Although these checks may give us a short morale boost, keep us driving a few more days, and allow for a positive political statement to America that something is being done; the reality is … it’s doing very little to boost our business bottom line.