You’re getting $8 more each week from the government. Richard Thaler has some advice on what to do with it.

I think the answer depends on your circumstances. If you are carrying lots of credit card or other forms of debt I say your first priority should be to make progress on that. Call it a private bail-out of the banks if you want. If you are lucky enough to be solvent and you want to spend your money patriotically then I would encourage what might be called “home infrastructure” spending. There are lots of unemployed contractors out there. Get some bids on making your home more energy efficient. It is probably as good a financial investment as you can find these days, and will put some people back to work.

Read other economist’s suggestions at Real Time Economics.

Addendum: For readers who are a bit confused by the headline, $8 refers to the amount of money that will be added to most U.S. workers’ weekly paychecks starting in June, as a result of the recently signed stimulus bill.

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2 Responses to “You’re getting $8 more each week from the government. Richard Thaler has some advice on what to do with it.”

  1. Steve Booth Says:

    hi nudge,
    I can’t imagine that $8 a week is going to make a huge difference, and I worry that many people will look at it as a chance to go to McDonalds or Starbucks one more time a week. But if you see where it is coming from (payroll taxes that are supposed to be funding the future solvency of social security), I would have to advise saving it since the government is just spending more of our future retirement wealth and as individuals we will need to save as much as we can!) ~ Steve Booth
    PS. Sorry McDonalds… I’m sure you could use it too. :)

  2. Robert Haarman Says:

    Think about what we say. The government is not adding anything to a paycheck. This sounds like a handout. The government is taking $8.00 less of your earnings from the withholding it would otherwise be taking. Remember – language forms thought.

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