Retirees in particular should be outraged at the federal government’s economic stimulus plan: http://news.yahoo.com/s/ap/20080124/ap_on_go_co/economy_stimulus

House leaders and the White House announced today — Thursday Jan. 24, 2008 — a tentative agreement on an economic stimulus package of roughly $150 billion that would pay stipends of $300 to $1,200 per family and provide tax incentives for businesses to encourage spending. A stipend of at least $300 would be paid to all workers receiving a paycheck, even those who did not earn enough to pay taxes last year.

The plan does not extend low income programs like unemployment benefits or food stamps. And, most critically it does not offer anything to seniors not receiving a paycheck (Social Security checks do not count.) Retirees who do not “earn a paycheck” but pay taxes do not benefit at all by this “stimulus” package.

Retirees need to think about the following questions and issues:

• Do you believe that this plan will prevent a recession or delay it?
• What long term problem does $300 per family solve?
• Will inflation continue to increase and, if so, how are you going to protect yourself from inflationary pressure?

The current economic crisis is not about liquidity, it’s about solvency. A cash injection might keep the children and grandchildren of retirees spending on HDTVs and Xbox 360s, but it is not going to pay off anyone’s bad mortgage. It will just end up inflating the economy and depleting what’s left of the U.S. dollar.

Most alarming is that the cost of food, health care, and energy have risen at a rate far faster than wages have increased for the average American. Some cash is not going to loosen wallets tightened by the rising prices of these core goods.

Retirees earn a fixed income and are the group who are most hurt by inflation. The value of your existing savings and income are greatly diminished. (Read more here about how inflation can devestate a good retirement plan: http://www.newretirement.com/Planning101/Inflation.aspx)

So, this economic stimulus plan does not offer any short term relief to retirees and could potentially hurt them even more in the long run because it does nothing to cure the fundamental economic ills we are facing.