Some thoughts on the "Stimulus Package"

I know that I've openly bashed the government stimulus package - which is to give away $150 billion to taxpayers. I was thinking about it again today and thought I'd give it a positive light as well. I would say I'm neutral now. Lets think about what this package means:

When every taxpayer/couple receives a check for $600/$1200 (and those with children, even more), what are they going to do with it? Spend it immediately? Pay back some debt? Keep it in the bank? The answer is - "all of the above". What does this mean for the economy? Does it mean that consumer spending will suddenly start uptrending again? I don't think so. But there is a caveat - What the government is doing is practically giving away $150 billion back to the nation's banking system. All within the next couple of months. Because when you give money away, where does it go? Under the mattress? (maybe) - but most likely the bank account. In addition, given that most of our population is in debt (credit cards, etc), a good portion of the stimulus package will go towards paying down debt, which basically means what? Once again the money returns to the lenders - who are also called the Banks. Thirdly, if the consumer ends up spending this rebate on goods from your neighborhood store, where does the neighborhood store end up putting the money? I think I've made my point. And the government is doing this without calling it a "bailout". The only question is, how significant is $150 billion of liquidity? I'm not sure - maybe someone who has done a quantitative assessment of our banking industry can answer that. But if liquidity for the financial sector is the issue here, I would say this at least tries to address the issue.

So while on the surface I think the "stimulus package" sounds fairly foolish - maybe there is something to it.