Economic-stimulus plan gets cool reception
Posted
Jan 18 2008, 05:38 PM
by
Karen Datko
Rating:
Wall Street isn't alone in its lack of enthusiasm for President Bush's economic-stimulus plan. Some personal-finance bloggers wonder whether it makes sense to give tax rebates to American consumers in hopes that they'll spend it and boost the economy.
Our partner blogger Jim at Blueprint for Financial Prosperity writes: "With the stock market taking a pounding, with the billions in bank write-offs, with the subprime news, and all the talk of a recession -- whether we're actually in a time of economic crisis or not, people think we're in a time of economic crisis, so I'm inclined to believe they'll save any money the government decides to dole out." Referring to a Wall Street Journal blog, he notes that most people saved the money the last time the government tried the tactic, in 2001.
He adds: "Tax cuts plus deficit spending -- how much longer can we be ripping the golden eggs out of the golden goose before the poor thing dies and China stops buying T-bills?"
Jason at The Frugal Dad also remembers the 2001 rebates. He urges readers to use any future rebate to pay down debt or build an emergency fund.
Moneychallenge at The Great Money Challenge admits to not being an expert on the economy, but doesn't see logic in a rebate. "From what I have seen, things get pretty crazy when spending gets out of control. That's what's gotten us in this mess in the first place," MC writes.
Several days before the Bush plan was announced, Betsy Teutsch at Money Changes Things had some relevant observations. She said the much-noted drop in consumer spending may just mean that people are becoming more responsible with money. She writes: "Supporting the economy by borrowing money to buy stuff, wasting a lot of it, and then paying interest on your purchasing seems like a very bad idea all around. So when I see a headline like in the New York Times today, "Americans cut back sharply on spending," I wonder why that is bad news."
