Wednesday, February 13, 2008

PostHeaderIcon The Checks Are In The Mail -- sorta

With enough fanfare to break into the he-said / he-said Congressional testimony of Roger Clemens and admitted liar Macnamee, the President signed the so-called economic stimulus package today.

Perhaps because I won't be getting a "rebate" (aka, money borrowed against next year's tax return), I'm a little less sanguine about the whole thing.

Anecdotally though, I did an informal survey of friends who would be getting a check (eventually, some time in June) -- most would use the money to pay down their credit card. The next largest group would sock it away in savings -- just in case the recession turns down more or gets more drawn out. Only a couple of people are thinking about using the "windfall" for a spending spree.

Interestingly, this break-down follows what most tracking polls nationally have found.

The upshot?

The government is borrowing a little over $150 billion against next year's tax receipts (printing money), of which about 80% will go towards paying down creditors or into a rainy-day fund. That means only $30 billion in potential consumer spending in a multi-trillion-dollar economy. Sorry if I'm not impressed.

I'm also waiting to see what happens next year when people don't get the refund they were expecting -- or have to pay taxes -- because of the rebate they got this year.

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