New Wave Outpost Forum

So what is your opinion of Pres. Bush's latest plan to issue us rebate checks again ? Just like in 2001, when they sent many of rebate checks of $600, the idea is to send $800 if single/ $1600 if a married couple if you make under $85,000. Although I have a feeling by the time it actually happens, it'll be more like $500. Is this sound ?
Do you think this will really stimulate the economy, as Bush wants, or will people save theirs--or use it to pay off debt, which is probably more than $500 anyway ?

Discuss.

Oh yeah, and CNN.com had a poll up about what people would do with the money.

How many would spend it on [b]fun[/b], as Bush wants them to, to stimulate the economy? A whopping [b]11%[/b].

How many say they'll spend it to [b]pay bills?[/b] A vast majority of [b]58%[/b].

I think that shows that people are in deeper trouble than the Feds think, and using it to pay off bills is not going to achieve what Bush intends.

I would pay bills.

Take that Bush!

"So Lonestar, now you see that evil will always triumph...because good is dumb."

I tend to owe money on my income taxes, so this money would go right back to Uncle Sam.

$800. It's better than nothing, I guess. What's the going rate for two hookers and an 8-ball these days, anyway?

[quote][i]Originally posted by i_like_lectric_motors[/i]
<br>$800. It's better than nothing, I guess. What's the going rate for two hookers and an 8-ball these days, anyway?



[/quote]

<p align="justify">Two chicks at the same time will run ya a $500 tab in koreatown[}:)]

Don't forget that to save your check because you'll just have topay it back on your 2009 tax return anyway !![:(!] Seriously, remember that after 2001 ? YOu had to claim it as income on that next year's tax return.
This is not a good idea, and the idea that something this "instantly gratifying" will stimulate the economy is complete BS. It's just the administration's way of putting off the inevitable. Putting $$ in the pockets of the sheeple is unsound, Keynesian-style economics. The GOP is hoping that we will turn around and spend any money like drunken sailors, like they've been doing since 2000. The economy needs fixing NOW, and it will take something much more profound than dangling carrots.

Urgh! (gets off soapbox). I get so mad at this kind of stuff ![:(!]

I guess the last two tax cuts worked so well that a third time around will be the charm. If tax cuts and rebates are so effective at stimulating the economy, shouldn't we keep lowering taxes until taxes are eliminated? The way politicians praise tax cuts, you'd think they'd just follow the argument to its logical conclusion.

We have a populace that saves nothing and is maxed-out on credit debt. Our government continues to borrow-and-spend us into oblivion. So now they tease us with tax rebates, which will just be added onto the sky-high federal debt (hey thanks for funding our tax rebate, Peoples Republic of China).

Sorry to be so pessimistic, but our dysfunctional, incompetent government is running this country into the ground.

So what are your suggestions? What is it exactly that we do NOW?

[quote][i]Originally posted by coop41[/i]
<br>So what are your suggestions? What is it exactly that we do NOW?
[/quote]

Save it up for when I have to start paying $4.00/gal for gasoline![}:)]


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As the saying goes, there are no silver bullets. This is likely to be a nasty hangover, and not a whole lot can be done until consumer/households and the business cycle recover from it.

Having said that, there are some stimulus suggestions floating out there which may be more effective than a hail-mary tax rebate:

Ratcheting up Federal Grants to States
http://www.nytimes.com/2008/01/16/opini ... =permalink

"States and localities depend on property taxes to finance much of their operations, but as foreclosures grow and home values fall, local revenues are taking a big hit, forcing towns and cities to cut back on needed projects at precisely the wrong time, economy-wise."

Discussed here:

http://economistsview.typepad.com/econo ... stimu.html

coop41,
I wish I knew. I'd be a new wave Economist if I knew ![;)].
I think we'll have to go thru this "recession" right now. It'll be rough for a bit. Inflation right now is also pretty high (I read 14%, which seems high; I'll go track that down). It just seems that money keeps getting printed and thrown at the problem, which makes it worse. Sally above mentioned local property taxes...it will be interesting to see how local governments fare when house appraisals fall thousands of dollars this fall. The housing "bubble" isn't just bad for consumers--it removes tax revenue from your local governments. Local gov'ts everywhere are going to suffer when this comes around.
I don't know. There are no clear or easy fixes. I think a massive overhaul is needed, though. Our economy has been tootling along on autopilot for decades now, based on old economic models, U.S. factory-based, almost an Industrial-Revolution-type model, which has been long since defunct. But since the rich in this country have been outsourcing and/ or investing overseas for quite some time now, they don't feel it the same way we working class do, and thus the disconnect. It is easy to blame Bush and his cronies. But this damaged economy has been shaped by years and years of various administrations' tooling around with it. (not to mention things like when Clinton got our deficit into the black). I wish I had the answers. I was interested in hearing more of everyone's opinions about these rebate checks, and what you plan to do with yours.[?]

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I appreciate the suggestions and opinions, it's all too often people complain with no real solution provided.
Having been in the banking business for 24 years, it is my fear that the general population doesn't realize the tidal wave that has begun to hit with a down turn in real estate (of this significance - nationwide) coupled with the crippling of the lending business. Previous dips in real estate were met with Banks and Mortgage Companies becoming creative, aggressive, etc. to bail us out. This time, as the market deteriorates, credit is becoming increasingly more difficult to obtain as lenders grow more conservative. The Real Estate industry has carried the economy for so long,in so many different ways (Heck, if I recall, half the board was bragging on how much "money" they were making with their homes).
You hit the nail on the head with our economic models being outdated. It's laughable.
The tax rebates are a short term (but maybe necessary) solution, I'd hate for the states to get it as it's my opinion they are not the best at handling money. I'm not in favor of either idea really but I'm not sure anyone has the quick fix we crave in America. I think Greenspan was given a free pass for a long time and he's having to answer some tough questions right now. Here's an idea, all these political yahoos "running" for President, how about we take all the Donation$ they blow through and pump that into our economy in ways that will really help....and as soon as Congress determines if Roger Clemens really took steroids or HGH or whatever and they make the Yankees give back their World Series rings (see Marion Jones), maybe they can spend some time on some areas that really matter to us.

That rebate check wouldn't do much good here on Long Island. If you make under $85,000.00 a year you wouldn't be able to survive. So many of us wouldn't be eligible for this. And believe me, if you are making $100,000.00 a year here, that's not enough for more then your bills.

I'll donate the $800.00 to the Ron Paul campaign[:)]