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Will Stimulus Rebates be Eaten Up by Inflation?

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Starting next week, the stimulus package’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: “This 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, we’ll have more left over to spend on the kinds of commodities and services that drive our economy (cars, electronics, dining out, etc.). But it’s interesting how a few months ago the rebate was supposed to fight recession but now it’s being portrayed as a way to help us with inflation.

Does that mean we’re in a period of recession and inflation? No. Not really. But there’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, we’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 it’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.