Rebate Check (part II)

If anyone is curious how Americans are spending that stimulus check, here’s a website dedicated to sharing those stories. Not surprisingly, many are using it to pay off debt. I’m sure that wasn’t quite the intention of the rebate, but it gets into the economy either way. If I purchase a dishwasher with the money, that increases the revenues of the dishwasher company. They can in turn reinvest that into growth (theoretically). If I pay off debt, I send money to Visa or American Express. They will in turn either reinvest that money or lend that money out again. There is a stimulus in the economy, but I would equate it to a burp. The money has been “digested” already; our economy will need real sustained growth to come out of this funk. Rebate checks are nice, but they fall well short of a long-term solution.

 

Rebate Check

There should be little doubt at this point that our economy is hurting. But, what does this mean? Besides the obvious fact that many Americans are now out of work, or looking for work, there is the predictable backlash against some scapegoat. Our economic woes aren’t our fault, they must be someone else’s. I recently received this email that perfectly illustrates what I’m talking about:

As you may have heard the Bush Administration said each and every one of us would now get a nice rebate. If we spend that money at Wal-Mart, all the money will go to China. If we spend it on gasoline it will all go to the Arabs, if we purchase a computer it will all go to India, if we purchase fruit and vegetables it will all go to Mexico, Honduras, and Guatemala, if we purchase a good car it will all go to Japan, if we purchase useless crap it will all go to Taiwan and none of it will help the American economy.

We need to keep that money here in America, so the only way to keep that money here at home is to buy beer, since those are the only businesses still in the US.