Saturday, January 26, 2008

Free money

Am I the only one who doesn't feel quite right about these government rebate checks the federal government is about to hand out? Comments from Left Field wonders, like me, exactly where the money is coming from, though on the whole the writer is not opposed to the idea of priming the pump, so to speak.

I don't pretend to know enough to discern whether this is good economic policy. Yet the idea that the government is implicity encouraging Americans to go on a sprending spree just doesn't sit right. Don't get me wrong; I'm not troubled enough to send the money back, or donate it to charity even. But nor am I going to blow it all at Best Buy. The portion I get as a result of having a child is going into her 529 account (maybe the mutual fund managers will buy something with the commission) and the rest will probably go toward paying down the balance on a home equity loan.

So if this country spirals into a recession despite the election year gift from our rich Uncle Sam, I guess you can blame it all on me.

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Blogger Vince said...

Don't you remember after Sept. 11, when the President (and Mayor Giuliani) told us all that we needed to get back to normal and spend money again?
If you don't spend your tax rebate, the terrorists win.
You don't want the terrorists to win, do you?
OK, sarcasm off, seriously, it never ceases to amaze me how the Republicans (allegedly the party of fiscal responsibility) think we can spend our way to prosperity.

1:59 PM

Blogger Jonathan Potts said...

I remember all too well.

I get the principal. People buy things, then people make more things, then people get hired to make those things. But a nation that a savings rate near zero, and in which most people aren't saving nearly enough for their retirement, doesn't need to be encouraged to buy more things.

2:34 PM

Blogger EdHeath said...

The pundits say if we don't spend the free money, then the money will be a waste. Except that just yesterday Jack Kelly was complaining that "Because financial institutions made so many bad loans, they have less money to lend to good credit risks.". So any money you save suddently becomes money available for banks to loan. It's impossible to say whether the loan will be a wise one, but we have no control over that.
People who put the free money into their utility bills will keep the utility services from writing off as much bad debt. People who fill their gas tanks with free money to keep going to their jobs will be helping the economy by not joining the ranks of the unemployed.

6:50 AM

Blogger Paul said...

Your Question: "...exactly where is the money coming from..."?

It's coming from YOU, from your paycheck. It's YOUR MONEY.

Don't argue with the concept of the government letting you keep more of YOUR OWN PAYCHECK.

1:18 AM

Blogger Jonathan Potts said...

Yes, I understand, Paul, where the money literally comes from. But while I'm not necessarily a deficit hawk, I do believe the government should try to live within its means, something it hasn't been doing the last several years. So what will be cut to pay for this loss of revenue?

And I also happen to believe that there are things government should be paying for. I'm sure you do too, though we might disagree on the specifics. This nation, for example, is plagued by crumbling infrastructure. How about the feds keep my share of the rebate and going about trying to fix that?

8:03 AM

Blogger NOT your wife said...

I don't know for sure, but I imagine that your wife would like you to spend SOME of that money... you know, in the interest of the economy...

4:14 PM

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8:18 PM


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