The Economic Stimulus Act of 2008 is official. Tax rebate checks will be on the way to millions of Americans as soon as the majority of the tax filing season is over. While the arguing over details about who gets how much money has ended, the debate over the pros, cons and ultimate wisdom of the stimulus continues to be debated. On paper, the rebates are a "gift" from the government - cold, hard cash for taxpayers (i.e. consumers) to do with as they wish. Officially, the government isn't about to tell taxpayers what to do with the money. Even so, government experts and officials have very definite ideas about how they HOPE it will be spent. Suffice it to say they are not being shy about expressing those hopes! Like it or not, that places the success or failure of the stimulus right back in the hands of the taxpayers (i.e. you and me). What will we do? Spend like the experts hope or sabotage the stimulus?
Here's the problem...What is best for the economy (spending the money) isn't necessarily best for individuals. Many (and probably most) families in America would be better off to save the rebate money and/or use it to pay off debt.
The message being sent to consumers is that doing what is, fiscally, more responsible will put the economy in even worse shape than it is already. If the money isn't spent "correctly" (or isn't spent at all), consumers are the "bad guys" because we were given "free cash" and we didn't take advantage of it. Without question, the government is taking a huge gamble that the American public will do what they want them to do:
- Spend it. Spend every single last penny of it and then some!
- Spend it sooner rather than later.
- Spend on domestic products and services.
If the 2001 rebates are any indication, more than 1/2 of us will spend it. Or at least spend some if it! What about the rest of us? I don't want to be accused of deliberately making the economy worse. I don't want to misuse this money either. I want it to actually feel like a gift and not a burden. If I use it to pay off some debt or pad my savings account, does that mean I haven't done my part for the economy? I hope not.
I don't know enough about monetary policy to know whether these rebates are a good idea theoretically. Even if they are, the U.S. Government is not revered as a model of efficiency. There is an excellent chance that, if it is going to give money away, it could exercise greater control over how, when and if it is spent. I like what
Glenn Beck had to say in his article
"Debit Cards for Everyone". He maintains that this whole stimulus package is more about whose politically right and wrong than how to get the economy back on track. He also contends that government issued debit cards would be a better way to control the distribution and use of the rebate funds.
Personally, I am not that picky. I'll take my rebate via check, debit card or rolled pennies! Absolutely, I'll use it and be thankful for it. I just hope that, in the process, I don't sabotage the stimulus.
