Jan 24, 2008

On the Proposed Economic Stimulus Plan

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I read with interest the announcement by President Bush that his administration reached a bipartisan agreement with House leadership on an economic growth packagethat would provide tax rebates of up to $600 for individuals and $1,200 for couples. Families eligible for this program would also receive an additional $300 per child.

In my case, we would receive $1800 from the federal government sometime around mid-April to mid-May, depending on how quickly Congress gets the compromised bill back to the President.

As I mentioned previously, I will gladly cash any federal check that the Treasury Departent wants to send me. I remain skeptical, though, that $150 billion in tax rebates and business tax credits will provide much more than a temporary boost to the $13.86 trillion U.S. economy. Moreover, the tax rebates will exacerbate the projected $219 billion budget deficit in 2008, making the federal government a competitor in the shrinking credit market.

Given the rampant pessimism about the economy - nearly half of Americans fear a recession is on the way - I suspect that most people will be conservative with any rebates they receive, using the money to pare down debt, to purchase home improvements like tankless water heaters, or to boost emergency savings, much like blogger Momof3 plans to do.

Me? Most likely we will pay a few annoying bills, and take any leftover cash with us when we travel to Europe this summer. In our case, little of the tax rebate will spark economic growth here at home, though a few bistros in Barcelona and Milan might be appreciative.

4 comments:

HumboldtsClio said...

I was reading Lou Dobbs, and he pointed out that if people do spend their rebate money on "stuff", US companies won't benefit anyway, because 90% of what we'd buy (stereos, furniture, clothing, etc) is imported.

Here's the link, in case you're curious:
http://www.cnn.com/2008/US/01/22/Dobbs.January23/index.html

Hooda Thunkit said...

I'll probably just bank it; I have no burning wants to quench, and $ 1,200 certainly wouldn't go far towards any planned future purchases.

(Thank you, as yet unborn great grand children...)

kooz said...

I don't understand why so many people are complaining about this. (Not you Mike) just people in general.

These people complain about the government taking our money in taxes...and now complain they're getting some back because they don't like the reasoning.

If someone stole something from me...and returned it...I wouldn't care if why they returned it....just give it back.

Then you have these idiot "tough guys" who say they will return it. Just take and shut up.
It's better than a kick in the ass.

The Screaming Nutcase said...

Kooz,

If it meant they were lowering government spending, everyone would all be for it. But since we all know it just means they're going to take it back again later, probably with interest, it's a little tough to get excited.