President Bush and Congress seem to think that throwing money at Americans is the best way to avoid a recession. This might work for the short term, but in the long run it is no solution. This idea was tried in 2001 with mixed results. Yes, it seemed to stop an upcoming recession, but did it was also attached to a future tax cut. Americans believed that this would be just one step in increasing their income and they were right.
This new plan will not have the same effect. There is no promise of future relief only a quick payout, which, by the way, will only be given to those Americans making under $150,000. Unfortunately, the Federal Government does not take into account WHERE you live in America. For instance, I live in New Jersey. If my salary is $150,000 here, I would only need to make $112,000 in Huntsville, Alabama and maintain my style of living. If you live in one of the high cost of living metropolitan areas, you are just out of luck.
If I did get a tax rebate, I certainly am not going to go hog wild and spend it. Most Americans will probably use some to pay down existing debt. We have certainly not learned to live within our means (look at the mortgage crisis) and giving a tax rebate will not solve that problem.
A few Americans will save the money, which is the best idea of all, but does not help the economy in the least. A wise American will put the tax rebate in a interest bearing account and save it for their or their children’s future or for when times really start to get hard.
Both the Federal Government and the American people need to learn to start spending wisely. The huge screen TV and stereo system will do you no good if you can’t afford basic necessities. And if the Federal Government can’t get their house in order, we will see such a de-valued dollar that our money will be worthless any way.
3 Comments, Comment or Ping
Scott
The perception of the economy is just as important as the factors at work in the economy. I completely agree; this is no long term solution. At the same time, it’s not being billed as one. The stimulus plan, combined with the Fed rate cut, may do next to nothing to save or even slightly help the economy in six months time, but there’s no question the combined factors saved the stock market last week.
Jan 27th, 2008
admin
And I think the perception of the economy is just what the media feeds to us. I have seen so many news reports about a pending recession which just makes everyone spend less.
Short term fixes will work for a short time, but I would hope that someone could come up with a long term solution for this country and I don’t think the current administration (including Congress) has any idea what to do.
Jan 28th, 2008
Trammel Fox
Actually, I believe the Economic Relief Program will help the economy. In this great nation so much of the burden to keep the government afloat falls on the taxpayer. When more money is needed for anything i.e.(wars, sinking economies due to layoffs, bailing out Wall Street, etc.) the working taxpayer is the one who flips the bill for it. It’s as if this nation has a never ending piggy bank. So yes finally, something that the taxpayer can really benefit from. Although, I agree many Americans spend what they do not have I believe the recent chain of events making Americans vunlerable (increasing gas prices, high foreclosures, layoffs, etc.) has open the eyes of many Americans who are in awe that this is happening in America. So I believe people will save more in the years to come due to these vulnerabilities that have practically happened over night.
Sep 24th, 2008
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