Will An Economic Stimulus Package Work?

[Retire Soon]

President Bush and congress are working on an economic stimulus package that could put as much as a $1,600 tax rebate in the hands of a married couple or $800 for a single person. With 70% of our economy dependent upon consumer spending, this could certainly help revive our sputtering economy. Do you agree or disagree?


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[haha]

Absolutely. Money always produces spending. However, the negative facotrs weighing on the economyu could overwhelm even this fairly hefty cash injection. This is the very next thing to helicopters dumping cash.

Ha

 

[clifp]

Will An Economic Stimulus Package Work?

To increase the deficit? absolutely. Will it make a difference to the economy? If the Congress gets its act together and acts quickly possibly, more likely no.

 

[Walt34]

I agree. We'd probably spend it right away on toys/entertainment since it would be "found money" and not planned on.

There is precedent for that. Gerald Ford arranged a $400 tax rebate in (I think) 1976. I spent it within a month or two, paying for a higher-than-expected annual inspection on my airplane.

 

[retire@40]

...We'd probably spend it right away on toys/entertainment since it would be "found money" and not planned on...

Well, maybe "we" wouldn't spend it, but "they" would. I would put it right in the bank.

I agree that the more of our own money we get to keep, the better for the economy since most people would spend it.

 

[UncleHoney]

Sure, any shot in the arm will help, but how long will it last? Within a few months all the money junkies will be back in line wanting another "fix" and in six months we'll be seeing the same old scenario play again.

I say, keep interest rates where they are, don't inject a cent of money we don't have, and let the market seek it's own level.

 

[Nanita8140]

Many will spend it
A lot more ( those that have come out of the spending fog and realized the mess we are in) will pay down some of their debt
Then the rare creature that has always been frugal and savings driven(like me) will save it.

 

[CCdaCE]

I heard the Democrats in Congress said "absolutely not" to a rebate/refund/etc. Since then, Bush backed down. I've heard the opposite too. I say we plug the $80 Billion leak that is Iraq.

The last time this rebate thing was attempted was 2001, wasn't it? $300 for single, $600 for married.

<snip>

I say, keep interest rates where they are, don't inject a cent of money we don't have, and let the market seek it's own level.

Sounds good to me, I'm accumulating.

-CC

 

[W2R]

It would make up for some investment losses. Personally I doubt I would spend it, though I might.

Hmmm..... the idea boggles the mind!

In a similar article at
Fiscal Stimulus Plans Gather Steam (Breaking News) | SmartMoney.com

Bernanke said any program Congress and the White House adopt should be carefully designed to funnel money quickly and temporarily into the hands of those most likely to spend it.

TEMPORARILY? I guess if they don't extend the tax cuts, they'll get it back soon enough.

 

[Robert the Red]

I've already planned to spend it -- but on a trip to Tibet, so that won't help the economy here much.

 

[megacorp-firee]

I think I would spend a large part of it on wine and women ... the rest I would squander

 

[militaryman]

Sure -- If I am having a budget problem and I pay off a few bills with my credit card then things relax a bit for the immediate future ... But the bill still comes for the credit withdrawl made ...

If they do a stimulus package it is another check we are writing that our grandkids will have to pay for.

The only way I would agree to it is to cut spending from the budget equal to the stimulus.

 

[Retire Soon]

I heard the Democrats in Congress said "absolutely not" to a rebate/refund/etc. Since then, Bush backed down. I've heard the opposite too. I say we plug the $80 Billion leak that is Iraq.

The last time this rebate thing was attempted was 2001, wasn't it? $300 for single, $600 for married.



Sounds good to me, I'm accumulating.

-CC

Yes, the tax rebate was $300 for singles and $600 for couples in 2001.

 

[MikeD]

According to Robert Samuelson, who I read in the Washington Post, it will be too small to have an effect on an economy as big as ours.

I have not linked to this site before but I found the article on the Interweb:
RealClearPolitics - Articles - Stimulus Will Be Unneeded or Too Little

Mike D.

 

[OAG]

Yes, the new HD TV is going to be ordered this afternoon if the Government is going to pay for it.

Isn't that the Patriotic thing to do?

 

[W2R]

Yes, the new HD TV is going to be ordered this afternoon if the Government is going to pay for it.

Isn't that the Patriotic thing to do?

I would imagine that a LOT of Americans will follow your lead. This will be a windfall for those companies that make HDTV's, I think. Many of them are headquartered in Japan, too, though I'm sure a lot will also go to retailers like Circuit City and Best Buy.

 

[FinanceDude]

Didn't the last one reduce your refund, in effect, making it an "early tax refund"??

 

[DallasGuy]

I read that if they give a rebate only people under a certain income would probably get it. One online article speculated that only singles making under $85,000 and couples making under $110,000 would get it. I suppose that makes sense since they are the people most likely to need it and most likely to spend the rebate. Of course, it still remains to be seen if there will be income limits on a rebate.

 

[cashflo2u2]

Those were called "prebates" but I don' think that is the case with this one.

 

[aaronc879]

I read that if they give a rebate only people under a certain income would probably get it. One online article speculated that only singles making under $85,000 and couples making under $110,000 would get it. I suppose that makes sense since they are the people most likely to need it and most likely to spend the rebate. Of course, it still remains to be seen if there will be income limits on a rebate.

I like this idea. Limiting the number of people that get it helps to keep the deficit from going too much higher while still getting help to those that need it most. If Bush is proposing it though wouldn't it only go to the top 1% of earners

 

[Bikerdude]

I read that if they give a rebate only people under a certain income would probably get it. One online article speculated that only singles making under $85,000 and couples making under $110,000 would get it. I suppose that makes sense since they are the people most likely to need it and most likely to spend the rebate. Of course, it still remains to be seen if there will be income limits on a rebate.

I also heard the word "workers" in the rebate plan. So us retired folks may be out of luck .

 

[OAG]

I was kidding about the HD TV, although I agree many will buy one. But now we have to wait until June 2008 to get the money; talk about acting quickly.

My solution would be to give every valid and still alive SSN with a good address a DEBIT CARD with maybe a 90 Day expiration date. That way everyone would get one; it is quick and IT WILL BE 100% spent or the card expires. "Simple, Quickly done and Quickly spent". I bet this is too simple for the folks in Washington, DC, especially for those that think quick is June 2008.

 

[martyb]

If we get 16 hundred bucks, it won't buy any new toys. It'll either go to our IRAs or towards paying down a couple minor debts.

 

[CCdaCE]

I thought Forbes had a good article covering most of the bases, or alleged bases.

-CC

 

[danm]

It's doubtful it'll have any impact. We're in an insolvency crisis (along with a few others including a consumer debt crisis), all the money will do is make voters look a little more kindly on the incumbent president, perhaps.

Actually there's not much either the Fed or the fed govt. can do to fix things, it just has to work it's way through.