Will Stimulus Rebates be Eaten Up by Inflation?
Starting next week, the stimulus packageâ€™s tax rebates will be going out. Most Americans will receive a sizable check. Thanks to some unusual government efficiency, the checks are actually going out earlier than expected. President Bush says this is a good thing because: â€œThis money is going to help Americans offset the high prices we’re seeing at the gas pump and at the grocery store.”
Hold on. Gas and food? I thought this was an economic stimulus plan, not a mass welfare distribution. I guess the idea is if we have more to spend on necessities, weâ€™ll have more left over to spend on the kinds of commodities and services that drive our economy (cars, electronics, dining out, etc.). But itâ€™s interesting how a few months ago the rebate was supposed to fight recession but now itâ€™s being portrayed as a way to help us with inflation.
Does that mean weâ€™re in a period of recession and inflation? No. Not really. But thereâ€™s enough reason to worry. The economic mood is simply not one of prosperity. When the president has to talk about the government helping people afford necessities, weâ€™re not in a good place economically or psychologically.
Whether the stimulus package actually stimulates anything remains to be seen. My rebate is going straight to pay off healthcare bills. I imagine many others will use theirs in a similar way, to shore up their financial situation rather than making a run to Target or Best Buy. The one-time cash infusion will be nice but itâ€™ll be gone quickly. I have a feeling we may still be in this economic/psychological slump come November. It will likely be the dominant issue of the election.