Suze Orman's Advice to 'Larry King Live' Viewers: Use Rebate Checks to Pay Down Debts, Invest for Retirement

"People first, then money, then things." -- Suze Orman, financial expert, New York Times best-selling author [e.g., "Women & Money" and "The Road to Wealth -- Revised Edition"], speaker, Emmy award-winning TV show host, PBS fundraising partner

In January, President Bush announced that the federal government will be sending rebate checks in the amount of $300, $600 or $1,200 to American households -- perhaps as soon as this May or June. This so-called "stimulus package," he said, would boost the U.S. economy and, thus, help steer us clear of a recession. How? By enticing people to buy more stuff.

Last evening, during her guest stint on CNN's "Larry King Live," lauded financial guru and best-selling author Suze Orman declared the economic-stimulus plan "stupid." Rather than go out and spend those checks, she advised, the viewers, callers and folks who e-mailed desperate pleas for her insights should pay down debts and invest in their retirement funds.

Here's a brief excerpt from Larry King's interview with Suze Orman:


...KING: But the government wants them to spend it. That's the point of it.

ORMAN: It's the point of it, but it's a stupid point. They never should have passed that stimulus package. They should never continue to count on saving this economy, because, again, the ordinary person out there is going to continue to spend. They can't continue to spend. They have credit card debt. They have car loan debt. They have mortgage debt.

KING: You're saying take the money and pay off bills?

ORMAN: Get out of debt. If you have -- if you get that money and you haven't yet funded your retirement account, put it in a retirement account. Do something so that little 600 dollars grows to 6,000 dollars and so forth, but don't go out and spend it. Stop it, people. Grow up already.

KING: But the government's case is: if you spend it, you stimulate the economy.

ORMAN: For a little bit. Can't they figure out another way to save this economy, except on the backs of the consumer who are so spent out it's not even funny? I mean, why would you even do that? Again, I could not be against this stimulus package more if I tried...

[BEGIN VIDEO CLIP]

UNIDENTIFIED MALE: Yes, my question would be, when are they going to lower the gas prices? $3.74 a gallon is hard to make decisions on what are you going to do for the week, the weekend. I need some answers.

[END VIDEO CLIP]

ORMAN: You know, it's funny. It's hard to decide what you're going to do for the week and the weekend. It's true. You can't even drive to work anymore, and then you start hearing things like here in New York City, where they're thinking about actually raising the tolls to come into the city. How are you going to do anything?

That is the problem, ladies and gentlemen. The oil companies -- we said this last time. We were sitting right here. Record profits, yet they're charging you record prices. I don't understand it. I wish we could do something about it. It seems like we can't.

It seems like oil at 100 dollars is here to stay. So all I can say to you is you better get used to these prices, because they are here, which means you have to cut back on everything, which is why you're also upset.

Again, Larry, don't get me started on this. It makes no sense that oil should be this high. It makes no sense that -- that commodities should be this high, that wheat and milk -- doesn't make any sense, but yet it's here...


To read the entire transcript of last night's show, go to: http://transcripts.cnn.com/TRANSCRIPTS/0803/25/lkl.01.html

ProsperNOW's take: Thank goodness for Suze Orman's keen, candid, common-sense approach to managing finances! Perhaps our nation's next president will have the good sense to enlist Suze's wide-angle expertise in getting us out of this economic mess -- ? One can only hope...

SOURCE: CNN
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