What will you do with your $600? Buy some crap made in China or Malaysia? How will that help the economy exactly?
With the understanding that it would take longer to get into the economy and that urgency is an issue, here’s what I would have done if I were the czar. I’d buy $150 billion (the cost of the stimulus package) worth of infrastructure repairs — roads, sewers, bridges, schools.
Let’s see — the work would have to be done in the U.S., much of the money would be in paychecks spent locally, we’d all benefit. Even the wealthy who won’t see any of the rebate*, would be better off with improved roads and bridges that don’t collapse.
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* The rebates are phased out if your adjusted-gross income is more than $75,000 ($150,000 for couples), slightly more if you have children. Those making more than $87,000 ($174,000) get nothing (again depending on children).
Once upon a time agriculture was the engine that powered the American economy. Then our abundent natural resources were put to use during the Industrial Revolution and manufacturing was the new and much more powerful engine; the one that drove our nation to superpower status.
Then we were told that our economy was changing into a service economy.
But we have sent our manufacturing jobs to China and we are sending our service jobs to India.
I guess the engine that drives the American economy in the 21st century will be tax rebates.
I’m going to use my $600 to pay off my mortgage, buy a new foreign car, and maybe have a couple kids and put them through college. If there is any left over I’ll invest in foreign stocks.
The Chinese have to love the prospect of the U.S. borrowing $150 billion from them for Americans to run out to Wal-Mart and buy $150 billion worth of Chinese made goods.
I agree — So much infrastructure work needs doing. Construction has been driving our economy for several years, and those jobs have to be done here. I’m afraid it would be like after Katrina though, no-bid contracts without prevailing wage to Halliburton.
It’s a shame that they didn’t include extending unemployment insurance, food stamps, or home heating assistance. Those would help many of the people who need it the most and would spend it the fastest.
Let us face the fact that these politicians do not work for us, they work for multinational corporations who do not care.
The average idiot will be happy to have some dough to invest in his aluminum cans.
I’m going to spend my income tax rebate paying my income taxes.
The middle class is essentially now on welfare.
Another indication of how screwed up the political system is in this country. Spending money on goods made overseas merely transfers the benefit elsewhere with very little economic effect within the US.
Cycling the money first through badly needed infrastructure projects (the modern day version of WPA) would, as Michelle points out, put substantial bucks in the hands of middle class workers (whoever they are) before transferring the benefit overseas through their purchase of staple goods that are no longer grown or manufactured in the US.
That’s what should have been already underway rather than stuffing the money down the rat hole that Iraq has become.
The reality is, however, that the dozing Fed got caught with their pants down and election year needs of politicians who need to take credit for something melded nicely to produce this lame giveaway.
I have to agree that your proposal is better economic policy than the bread and circuses approach being taken.
Now, this doesn’t mean that I’m horribly strongly opposed. A proposal to give my family $1,800 is almost never the worst of all possible policy options — not as good as a proposal to give me $150 billion perhaps, but beggars can’t be choosers.
I am like others commenting, inclined to use the $$ to reduce personal debt.
The rebate checks won’t be mailed before May at the earliest, so I guess I can’t use mine to pay my 2007 income taxes.
According to the Tax Policy Center, 58% of the rebate money is going to the top 2/5ths of taxpayers, even with the phase out.
The stimulus plan has only been worked out between the Administration and the House, which is supposed to approve it in two weeks. The Senate may change it.
I’m going to use mine to help the poor grape farmers of Chateauneuf du Pape and Bandol. It seems the least I can do.
Spending on infrastructure is a long-term strategy. Planning, bidding on contracts, etc would take a much longer time than cutting rebate checks and legislating tax breaks for businesses. Rebates are a short term strategy that will in itself not begin to soak through the economy until the 3rd Quarter. Interest rate cuts are another short term strategy to boost spending and production (it’s also a good strategy for stoking inflation).
Lastly, if you’d like to use your rebate to pay your FY ’07 taxes simply file for a 6 mo. extension. It will take you only a few minutes.
I for one am looking forward to our rebates, as well as some sensible leadership in Washington. If you’re not currently planning to vote, please go register and send most of these fools back home where they can do less harm to the rest of us.
I will use mine to help the fine folks at New Belgium. Made in the USA (despite the name).
Strikes me as waiting until a crisis develops, then blindly toss money at the problem. There are worse options like handing out more corporate welfare, or starting another war but… Infrastructure improvements would provide a lasting benefit as can be seen from the WPA projects that are still around 70 years later.
Infrastructure improvements also will maintain employment and reduce the number of people getting unemployment benefits or other governmental assistance
Another possibility for a project I saw in Scientific American is “A Solar Grand Plan,” http://www.sciam.com/article.cfm?id=a-solar-grand-plan
This may be pie in the sky. But it should be looked at. Could the federal government do something like this and retain ownership based on the percentage of investment so that by 2050 basic power needs for a home could be a basic right supplied by the government like roads are now?
That said even if I think it’s a stupid idea. I will gladly accept the $600. and put it in the bank as a buffer in case I get laid off as a result of this economic mess.