The Economic Stimulus Package that Republican and Democratic incumbents want to push through in an election year to help them retain their political posts is completely ignorant and just gets worse and worse. The Economic Stimulus Package is neither Liberal or Conservative. It is solely intended to help our current politicians get re-elected and it is an embarrassment.
I will write several posts about this and limit each post to one central idea.
The details of the Economic Stimulus Package are still in flux due to the Senate...
First lets look at the rebate check idea. It looks like the final package will send "rebate" checks worth about 70 billion dollars to taxpayers who pay income taxes and are below a certain income threshold. Washington's intent seems to be to send these rebate checks to low and middle income taxpayers. These rebate checks will go to low and middle income wage earners with at least $3000 in earned income and those with dependent children will get more then those without dependent children.
The Democrats forced the addition of another 30 billion dollars worth of rebate checks that are actually welfare checks to lower income families who would not have qualified for the previously mentioned rebates since they do not pay Federal income taxes. These checks should NOT be called "rebate" checks; they are welfare checks and should be called welfare checks.
I am completely against the idea of rebate checks as outlined above for several reasons:
1. If you want to inject money into the economy then lower taxes a small amount permanently. When Washington lowers taxes they should do it by SIMPLIFYING the tax code.
2. It is absurd to go to the expense of sending rebate checks at all. If it has to be done it should be done as part of the income tax filing process.
3. I have looked at the research of several "think tanks" and respected economists concerning the actual impact on our economy the last time rebate checks were mailed out during the tenure of President Bush. If you average the studies it appears that between 21% and 22% of the money "rebated" to taxpayers was injected back into the economy directly; the rest was saved or used to pay debt. Considering that household debt has dramatically increased since the last "rebate" check debacle, I would surmise that even less of those rebate checks will go directly into the US economy this time. I strongly feel that most Americans will use their rebate check to pay some of the balance of their credit cards; this will NOT stimulate the economy; however it will help the credit card companies and banking companies clean up their balance sheets.
4. I do not agree with the criteria of who they want to send the rebate checks to. They exclude many middle income Americans AND they pay a smaller amount to retired Americans on Social Security.
In short; I detest the idea of rebate checks (30% of which are actually welfare checks) being used to stimulate the economy.