I’m not quite sure how rebate checks to people who already have jobs is going to really rescue our sputtering economy.
President Bush is expected to unveil his ideas for helping all of us, but the centerpiece seems odd to me…tax rebate checks.
Buying more junk for our already packed homes isn’t going to help the many people I talk to who can’t find jobs, or are struggling in jobs that don’t pay enough to keep up with ballooning prices. I’m sure a rebate could go to pay those escalating mortgage payments for the many people who went adjustable and got burned. But even that is a temporary fix. The Democrats want to extend unemployment benefits. But that too is a temporary fix.
I’ve been through many ups and downs in the economy during my many years covering the business world, and there is little that past presidents or Congress have been able to do to bail us out during those rough spots.
I think it’s fair to wait and see exactly what the President has in mind, but I’m not hopeful at this point.
January 18th, 2008 at 12:28 pm
I was reading another article this morning that got me thinking along these lines. Sure, sending everyone a check sounds wonderful (and it probably wins goodwill from some), but it will likely do little to help the economy in the long-haul. After all, if people are already behind in their bills, they are most likely to use the extra funds to get caught up. If they are not in arrears, they will likely add the funds back to other areas where they’ve tightened their belts (e.g., groceries or general household spending). Some people–those who are not feeling particularly pressed–may even save the money.
The thesis of the article was that, while it may not be popular, tax cuts for corporations are the only thing liklely to stimulate the economy. It makes sense, too (an\lthoug I find myself cringing as I write this because I cannot stomach the range of most executive salaries in the United States of America). Giving the little guy a check is not likely to spur job growth, or to change consumer perceptions. Cutting corporate taxation could encourage businesses to expand or to resume hiring.
Of course, giving big business tax cuts without strings attatched might not be a wise idea. What about tying the cuts to job growth or (in my dreams) to reductions in executive compensation levels?
January 19th, 2008 at 10:16 am
I think that reasoning would have been more effective in a pre 1990s economy. I can’t help but think before then corporate titans would have indeed spread the wealth, at least much more than today. Today, it’s all about getting every penny you can. That translates into doing the work with fewer workers. Let them work overtime, let them work til they drop, but by all means do not hire. That’s been the mentality in Corporate America. Companies will only hire if they are squeezed beyond belief. I had to say it HikingStick, more will go toward enriching the top level managers than it will to hiring rank and file employees. It’s the way it’s been for a while now.
The stock market doesn’t tend to like hiring. Shares climb big time when companies are firing.
January 21st, 2008 at 5:24 pm
It worked in July 2003 with the Bush tax cuts. Why not now? As you may recall, there was over six months of steadily increasing job creations, consumer confidence, small business confidence, and consumer spending that started the first week those tax cuts went into effect. Don’t remember? Check your economic history books. Refuse to acknowledge the benefits? Pardon, your liberal bias slip is showing. BTW. Total Government tax revenue increased too. WHY? Because everyone can only do two things with the extra money. First, spend it. Thus, generating demand, revenue, profits, and taxes. Second, Save it. Thus, the lenders loan the money to others who (all together now) SPEND IT. Thus, generating demand, revenue, profits, and taxes. Everybody wins. Except liberals who hate Bush. They whine.
January 21st, 2008 at 5:43 pm
You make a very good point. It seemed to work after the 2003 tax cuts, but all economists now say the economy is worse off than it was then.
I hope tax cuts and rebate checks work. I will be the first one giving Bush kudos. It’s all about helping those who are in dire financial straights, no? If people let their political bias trump help for the working man and woman, or the struggling to find work man and woman, then we’re in trouble.
January 21st, 2008 at 11:51 pm
Telleve,
You got it. The rebates will help the working man by generating demand, revenue, and jobs. I forgot jobs in the list above. Jobs also took off big time. As to the economy being worse, I don’t think so. Unless your definition of the economy is “Government” jobs and government spending. Recent surveys showed that over 66% were confident about their personal economic condition. Yet,only a third were confident about the national economy. Why the huge disconnect? the drum-beat of the drive-by media about the horrific economy. We have low unemployment, steady growth (slower to be sure). My small business concerns are finding qualified people, the price of gas taking discretionary income, and the lower stock market beating on my retirement accounts. Yet, my confidence remains high. 2008 will be better than 2007.
February 17th, 2008 at 5:34 pm
Giving a rebate to everyone is like giving alcohol to a drunk. Where is that 125 billion coming from, hmmm?
I don’t think the economy is in that bad of shape. We have had steady growth for the past 8 or 10 years, and a lot of jobs added this year. Although it has slowed some in the recent months, I think it is just an election year slow down. Nothing to get all worked up over.
Best wishes for your success,
Jack Bowles