Stimulus money: How would you dole it out?

Tampa - When it comes to the stimulus package the bottom line is its taxpayer's money we're talking about and a lot of it. Tuesday President Barack Obama's 838 billion dollar economic stimulus package passed the Senate and now it's on its way to difficult House-Senate negotiations.

Bucspasm commented on 10 Connects.com saying "Why can't it work this way? Instead of giving the banks all that money pay off our houses. I'll actually be able to afford that new car bringing jobs into the auto industry."

We went to the University of South Florida's College of Business to talk with Professor Ken Wieand about it. He's a professor of finance and real estate who says Uncle Sam paying off all our mortgages could lead to massive inflation. "So now we've paid off all our mortgages. We have all this spending money and we don't have any monthly payments. I want to buy goods and services but we haven't created any more goods and services. We just gave people a lot of money everyone's going to try to spend. We're going to have wild inflation."

Another Ten Connects comment from Maitre says why not just give the money to all of us to spend. "Bail out the consumer and they will spend and start stimulating the economy from the ground up."

Wieand says it sounds good but you have to look at the big picture. "They've got to get that money from somewhere either they print it which causes inflation or they borrow it which gives me a liability in terms of paying of government debt. How is the government going to pay that debt off? It's going to raise my taxes to get the money. I guess there's no way to create real buying power out of thin air."

So can the plan work? Professor Wieand has worked at the Federal Reserve Bank in Dallas; US Department of Housing and Urban Development and has been a consultant for the Federal Home Loan Bank Board and the United Nations Industrial Development Agency. He says "Think about the fact that they had almost no time to work all this stuff through. There's going to be a lot of debate about whether it was right or wrong. In a sense some of that is beside the point. They did something in terms of putting money out into the economy."