Rebate-mania: Borrow, spend, repeat
I said at the start of Washington’s stimulus-palooza that the temporary tax rebate plan was a bad idea. The solution to the problem of too many people borrowing money and spending beyond their means–charging their credit cards up the wazoo, buying more house than they can afford, etc., etc., etc.–is not to borrow more money for a one-time rebate that encourages them to spend more to produce a short-term, feel-good boost to the economy.
Borrowers under water need more incentives to save or pay off their debts, not to splurge on golf clubs and big-screen TVs.
Fortunately, many rebate recipients are refusing to go on spending sprees:
Jack Stines of Affton expects to get a tax rebate check, but he’s not planning to buy a new television or anything fun.
“We’re going to pay our bills,” he said. “That’s really going to take care of the economy.”
His sentiments were echoed by other shoppers at Wal-Mart in Maplewood who said the money would be used to pay down debt, fill up their cars’ gasoline tanks, and buy necessities, not to splurge on purchases they really could do without.
“Mine is going right back to the IRS. It’s not going to help the economy,” said Dave Wiechens II of St. Charles.
But retailers will do what they can to pry the cash loose:
With many consumers about to receive tax rebates worth hundreds of dollars, a handful of retail chains are dangling discounts and promotions to try to get people to spend their checks in the companies’ stores.
As consumer spending slows, these retailers have hit on a marketing pitch: We’ll make your tax rebate go further.
“The trick will be to convince the consumer that the rebate check is bigger than it is,” says Pat Conroy of consulting firm Deloitte & Touche.
There’s a sucker born…
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Have you gotten a rebate? What are you going to do with it?
Here’s the “IRS Stimulus Payment Status” website in case you’re wondering if you’ll be getting a check in the mail.
***
Ho about a little “Bills, Bills, Bills” for background music?
Can you pay my bills? Can you pay my telephone bills? Can you pay my aut-o-mo- bills…
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Categories: Subprime crisis, fiscal stimulus
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Paying bills…
My husband and I received our rebate today. All I could do was shake my head. We’re going to use the money to pay off debt, bills, put into savings.
My husband gets $300 to buy some parts for his 72 blazer. Everything else is going towards bills.
Who wants to bet inflation will rise as a result of this rebate?
I worked my butt off with 3 jobs, and was rewarded with the opportunity to pay over 30k in Federal and State Taxes and not be eligible for a penny of the “rebate.” Yet those who paid $600 in Federal Taxes will be happy to receive… $600. This is clandestine wealth redistribution on a trial scale. If they get away with it, look forward to more Democrats proposing “progressively” larger communist decrees.
I’m “splurging” on some much needed maintenance work for my Jeep.
Still waffling between dropping straight into savings or posting against a credit card balance. Other option is cash in a coffee can for when the next bank suffers a ‘run’ …
Well from the information I read, we won’t get ours until July. I guess we’ll spend some for a few extra nice groceries that we wouldn’t normally buy but the rest will likely go into savings. Fortunately we don’t have a lot of bills other than the usual taxes, insurance, utilities etc.
My $600 Spend-A-Palooza money landed in my account this morning. I would just as soon not take it, but if I were naive enough to return it the government would just throw it into one of their worthless black-hole programs anyway. I’m paying off a bill with it.
When we get our check it is going into our existing debt! So much for stimulating the economy.
Paying bills with mine…once those are gone, I’ll go get that nice large ticket item I’ve been wanting but when I can afford it within my means.
I plan to put whatever we get into mine and my husband’s IRA for 08 contribution. Take it off 08 fed taxes.
L
My $1200 bucks, should just about fill my gas tank…..
GuyPod!
No, not really. Maybe some arugula.
My wife and I got ours today. We are putting it in the ING account.
I’m going to give some to my wife to visit relatives with the kids. The gas for her trip will be really expensive. The rest will go to pay bills.
I have an idea. If the government “gives” us each $2,000 and that will boost the economy out of recession then if they “give” us each $100,000 we should be even better off.
Well then, why not give us each $1,000,000 so we can all be millionaires and really boost us all to national prosperity! Heck, if the government gives everyone in North America $1,000,000 then we can solve poverty in the whole continent and those illegal immigrants can stay home and make Mexico more prosperous too!
Wow! The government can make us all millionaires and we can spend ourselves into prosperity! Isn’t America great!
Either paying bills or saving mine……I’m sure Jorge will not be happy with that as he wants to keep those Chinese coffers filling up with dough…Sorry Jorge…You suck!
Paying off student loans, savings, and updating the monsters of computers we keep in the house.
Well, as one of the few odd-ball Americans who has no debt whatsoever (I live a life of saving, then paying cash when I have enough). . .
I’m planning on spending it on maintenance for my car, which has been in need of a tune-up for some time now.
This whole notion of giving the checks to all but the wealthiest is in fact the most dumb economic program. Giving it to wealthy people – who go buy country club memberships and vacations, or maybe even employ some extra people … makes the money get spent in USA. Giving it to those lower on the economic ladder gets it spent at Wal-Mart – going directly from there to China.
I know the Libs don’t, won’t and can’t believe it but the wealthy on average are more efficient with their money and therefore contribute more to general economic wellbeing than those lower on the economic scale.
I’m also aware the wealthy don’t “need” the money, but I will guarantee they would stimulate the economy far more productively and much longer lasting too.
Lastly – did it ever occur to anybody that these checks are exactly part of the reason oil keeps getting more expensive. How did the gov’t give out all these checks – they printed more money. Printing more money w/o any backing to it just makes each dollar worth less than before, so each barrel of oil costs more dollars (though not more Yen or Euros).
Why oh why do we let lawyers make economic decisions for us? (ie – most members of Congress have legal backgrounds, not economic)
Sorry all for the disjointed rambles but this stuff is all connected.
(1.) Real economic stimulus is a job.
(2.) Even better economic stimulus is no consumer debt.
(3.) Even more better economic stimulus is having the deed to your house.
(4.) Even more better, more better economic stimulus is the government letting me and my family keep more of what we earn.
(5.) Feel free to add your own economic stimulus thoughts here.
Savings and/or investment. We hope to be in the housing market in a year. This will add to our down payment.
Actually, as I understand it, we didn’t print more money for onec. Instead we borrowed from other countries, you know, like Saudi Arabia, to cover these checks. Yep, just increase the national debt for a mini-shot in the arm. Kinda like taking a payday loan, isn’t it?
#19 Yashmak
Same with me. My ‘00 Silverado needs some routine maintenance. I want a few accessories for my Harley Sportster, but that’ll need to wait until next year.
I’m going to buy…Oh wait, I’m not getting back a dime of the 122k we paid in federal taxes this year. Sucks being ‘rich’.
jfish #22
It doesn’t really matter if we printed more pieces of paper or printed more “IOU’s”. In both cases, I think we could safely say “we did it for the children” – we put them in a bigger hole.
Sure hope the libs feel good about that.
#25
So right. Either effect is destablizing in the long run, which bodes well for none of us.
Still struggling with why Bush has bought into this, but I guess it’s of a piece with the current state of things: gov’t being convinced they can control markets etc.
Rush had someone on not too long ago wondering why the government can send out all these massive stimulus payments, but Barack Obama’s blundering around out there saying that a gas tax hiatus would wreck the country’s infrastructure.
Our dearly beloved government doesn’t think the American public has a clue about finance. They are ‘giving’ us back money we already paid them. They spent ‘our’ money on gosh horrible amounts of pork and borrow from other countries because they can’t ‘balance’ a budget. But, you can bet your sweet bippy they aren’t doing without a pay raise or cadillac’s at taxpayers expense. Is there any way to find out how many of our elected in dc are getting a ‘rebate’ check?
L
#21
Real Economic Stimulus is looking for the words “Made in the U.S.A.”
st_james said:
Thanks for keeping the
roads pavedwelfare checks coming.It’s sad to think your federal taxes alone could’ve replaced one lousy gusset plate on the Interstate 35W in Minnesota.
Actually, this thread would be a good place to mention this: a fine blogger, a veteran, and a patriot, name of Stashiu, is undergoing some legal hassles with his adoption proceedings. Very expensive legal hassles. He has an Amazon Honor System button set up at his site and if you get a few shekels back from Uncle Sam, well, Stashiu’s a worthy cause.
Mine is going from 1 tax related service right into another, I get to pay the County Property tax collectors or otherwise, they come and take my house back. That’s fair.
Way I see it, a rebate is a tax break.
i’m getting $600 worth of arugula.
We are using our check to pay state & federal taxes, $500 repair bill on our 1999 Dodge Caravan (a/c compressor died), and the rest will be put in savings to purchase a new used van in the very near future.
S/D, Is there a mailing address I could send to? I didn’t see one on the link. I do checks, not on line. Thanks,
L
Yes, I will spend my rebate on landscaping. For the house I OWN! The one I have no trouble PAYING FOR, because I bought within my BUDGET! ATTN: Jose……
On May 2nd, 2008 at 3:12 pm, st_james said:
I’m going to buy…Oh wait, I’m not getting back a dime of the 122k we paid in federal taxes this year. Sucks being ‘rich’.
Well, I’ll tell you what, St. James. I’ll help you to carry your burden.
No need to thank me. That’s what friends are for, and it’s only the Christian thing to do.
A Reuters/UofM survey shows only 30% plan on spending the rebate.
Stimulus my eye…
http://tinyurl.com/6nd82s
What we’ve lost in buying power of the dollar, due this irresponsible stimulus policy, dwarfs any positive impact for taxpayers.
They are either all clueless in DC or they are criminals or both. That goes for the Fed, Treasury Secretary, Bush and all pubs and dems.
Anyone here in a union? If so and you care about your pension, I suggest you read this…
http://tinyurl.com/5dbkt2
Investing in Gold – the government can’t afford to give us this money, so they are resorting to old standbys – borrowing and printing.
More inflation leads to higher commodity prices and a weaker dollar. If you want to really shove a fork in the eye of our socialist administration, buy some gold. It’s at a great price right now.
letget, I don’t know his real name or address, so no. You might try e-mailing him directly to see if he’ll tell you.
Not knowing his name may raise some alarm bells, I know, but Patterico vetted Stashiu thoroughly before he quoted him in a great series of articles about Stashiu’s experiences as a psych nurse at Gitmo.
The accountant informed me yesterday not to expect getting any of the $12,000 income tax back since my income, except for a teacher retirment pension, is all Non Earned dividend and IRA payment.
A caller to Rush this morning said they wouldn’t need to ’stimulate’ the economy if they just left us more of OUR money in the first place! Now why does that make more sense to me?
Psychology is amazing!
We are getting back a smidgeon of what we paid in taxes, and we are in heaven when we get a check in the mail!!!!
They’ve got us figured out those Ivy Leaguers!
Khrys, I’m sorry about your predicament. That was me in 1996 (although I didn’t pay 30K, it was more like 17K in taxes) when I was working 3 jobs to replace my car which was stolen and buy a townhouse. I’m sorry about your situation. I don’t understand why we’re rewarding those who don’t pay any taxes in the first place.
We just got our tax refund (we filed the 14th) so I guess we’re getting one but it won’t be until later.
I remember the first time around they tried this. My department head whined about Bush doing this and I told her why doesn’t she just send it back to Uncle Sam. She told me they were going to go to Atlantic City. I heard some guy on Rush’s show the other day that he was going to the Carribean and gambling it.
Even though I was laid off a few months ago, we don’t qualify. Had I, I wouldn’t have appreciated it because I don’t think it will do a blessed thing for the economy. it’s to go into the commerce stream not pay bills…. but, sheesh what else can people do but pay bills thanks to our government.
i look at Beyonce and want to cry. is it possible for normal folks to have a body like that?
Jay Z’s paying her bills, that for sure.
Catching up on a few bills, paying off another bill. (And I’m getting more than $1200 because I’m ‘married w/children’)
For me: a year of the Pelosi premium = this tax stimulus, except I’m getting this stimulus in one shot, while I’ve been paying as much as $3.399 for gas since…
This stimulus/welfare check is such a horrible idea. Our GDP is now 70% consumption, our factories are dying, dead, or exported to other countries. We produce nothing and require debt to prop up this economy. Our trade deficit is ever increasing, inflation is out of control, and our national debt is closing in on $10 trillion. The whole country is afflicted with the same disease, debt spending, from the bottom to the top, and to fix it, what do we do?
The government borrows more money to give to us to spend on crap that’s made in another country – The exact reason we’re in this mess in the first place. We’re digging a hole for ourselves, and this stimulus check is just helping to make it deeper.
Want to buy something with this money? Buy a gun, buy food, buy gold. Because soon you wont be able to buy any of them.
Today is supposedly the last day that my rebate should be placed into my account – what a surprise – the feds screw up again.
How many liberal posters here are sending it back? I hear them complain all of the time about the deficit.
lgm, you giving yours back?
Somehow, I doubt any of them will.
Before you go there, I will not get one. Seems the IRS thinks I owe them – again.
I would be better off financially if they would have never taken MY money in the first place. Regardless, we have worked hard to be debt free. We live within our means and are pretty much minimalists when it comes to “stuff” (who wants to dust all that stuff any way?) We are getting ready to purchase a house, so it will probably go to the cost of that or into savings if we don’t need it to cover our costs.
Really if we want to help the economy we will stop, as a nation, living in debt. We have to pay it back one day… God help us if we leave our children with that mess to clean up! I wish our Government would figure that one out.
I just spent my rebate and then some on a new clutch for my gas guzzler with 200K miles on the odometer. Considering the prices on cars I’ll be driving it another 200K, and at the price of gas going up, this clutch will last twice as long since I’ll be walking more & more.
Too bad the rebate check hasn’t arrived yet.
Airline ticket for my next drill weekend, a credit card payment, a dual stroller, and if there’s something left over, then maybe a gun or at least some more ammo.
It’s hard to believe President Bush has a MBA with the dumb plans he endorses. Bailouts and rebates do nothing but make a lot of us very, very angry.
Just plugging holes in the dike. Mine will be going to rent in order to keep some of my pay in the bank and try to get some type of savings going. With a 26 month and a 7 month old it’s been real tough making ends meet lately.
#20 ConservativeRus – thanks for the post. Good point. My husband said the exact same thing last week.
We didn’t get a rebate, my husband makes too much. But as my husband said – everyone wants to save it or put it towards debt. The richer people would have gone out and spent it. So true…I know we would have.
I am not spending mine, it’s going into a savings account.
It would be nice to receive that check with the interest and penalties that the IRS charges you if you are late with your taxes.
For years, I’ve lived within my means so I don’t have any debt to pay off. Therefore, I’m going to spend it on something I’ve been thinking about for a while… a shotgun or pistol. I will also give some to my church. Does that make me a typical bitter white guy? I’m sure the rest will eventually make it into my gas tank.
Shamless plug:
Click on “On-my-soap-box” up there. We can put some bucks to work!
Confusion is a bueaucratic trait. Link provided to check status of rebate says in order to receive your rebate you must have filed more than six weeks ago. Duh? I did mine electronically and was accepted March 27 and received direct deposit eight days later. I guess one should always expects snafus with government agencies.
If you don’t pay off your credit cards every month, dump the whole thing into paying those off.
Terrig, thanks for your reply
Don’t get me wrong, I don’t have any problem with people getting a refund of money the Fed never should have tried to take and spend in the first place… I just wish they were a bit more even handed about how they returned it… say, $300 to EVERYONE who paid at least $300
Oddly enough my rebate check is going to be the exact amount that I just sent to the IRS.Therefore it will go back into savings so they can take it from me again next year.
Bastards.
I would like to use it to start building a fence on the border or maybe purchasing a testicle locator for the Republican Party. But I’m just a bitter white man. Gotta go hug my gun & Bible.
Putting it all down on my mortgage…one step closer to owning my home outright.
On May 2nd, 2008 at 4:16 pm, okiedokie,
Now that’s funny. I plan on spending mine on Wesley Snipe’s Defense fund….NOT
We’re not getting a rebate. Apparently only some are seen by congress as deserving one.
When President Bush did the first rebate as a beginning to his tax cuts, I did get one. But that’s because he had a congress that rightly believed that everyone is entitled to tax cuts. Not just some.
Mine has already been transferred into my savings account to be put down on a loan I am refinancing right now. I will pay that loan off in less than a year by making triple payments. Then after that, I will start making double payments on the mortgage.
And to ensure that no good deed goes unpunished, the government, seeing that I have been a good boy and managed my debt, will then hit me with AMT because I do not have enough mortgage interest to take anything more than the standard deduction. And they will then disallow any IRA contributions (which I always fill to the max).
So, basically, live within your means and the government will take more of your money to give it to the #$%#$%#$% who live beyond theirs…
The first Bush “rebate” was actually an advance your tax refund in the first place. Something a) fair and b) which would actually stimulate the economy. This giving money away that isn’t there in the first place simply saddles every child with more debt. It’s for the children.
Don’t get me wrong though – any money taken out of Washington is a good thing. The smaller the sandbox they have, the better.
Both my state and federal tax refunds went towards paying off my credit card debt.
I now have but one low-interest (8%) credit card, which I primarily use for travel expenses and online shopping.
As for my pending “Best Buy” Tax Rebate Check…I plan to use a portion of it for some much-needed dental work and the rest….again, towards my credit card debt.
S/D #42 Thanks, I don’t want to invade their privacy. I will re-think my on line thing. It seems like a good cause.
L
I am buying an assault rifle and ammo before the next election. I need to protect myself and family from gas siphoners and starving illegal aliens who are unemployed from the construction layoffs generated from the recent mortgage crisis.
I got my $600 rebate today. I’m 23 and single, and yet I’m still not going to spend it. The government is not giving money out for fun, they screwed up somewhere along the line and for them to think we’ll just go crazy with it is beyond me. I might even invest in some Euros.
I’m not getting one!
The last tax rebate came during the energy crisis in California. Remember that one, the so called “crisis” precipitated by Enron and other energy traders? Bush actually said this: “Californians can use their rebate to pay for the higher electricity rates.” It is estimated that 1/3 of the current rebate has already been consumed by higher oil costs. Let’s see: Borrow from the government to give money to citizens to pay for higher energy costs. I’m sorry Mr. President, but some of us are on to this scam.
Mine is going to rebuild my savings account. Silly me, after the divorce I built a house with a payment I could afford, sold the boat and bought a new car (a 1999 model that’s paid for). If I had known the gov. would bail me out with mortgage counselling and rebates, I could have built a bigger house.
Sorry MM, I was looking for a source for the California energy quote and I came across this. You started the day with a little humor, so I couldn’t resist.
http://www.anvari.org/fun/Political/George_W_Bush_Quotes.html
No rebate for me – I’m one of those Evil Rich Guys who pay most of the taxes.
I think your right Southpaw. They’ve been robbing Peter to pay Paul, and Peter is getting pissed about it.
I wonder how far my check would go if I were trying to build a nuclear power plant, oil refinery, or oil derrick in the Gulf of Mexico.
Guns! Ammo! Bibles! Bitters!
Just starting a new business
I’ll pay bills, too.
oops…I don’t think I get one, so I guess I’ll just keep plugging along and grow my own economy!
Of course today would be the day. Just got off the phone with my accountant.
I asked if her if I would be getting an economic stimulus check this year.
She just laughed.
.
.
.
.
.
.
Not that I expected one.
Paying bills. Not buying.
Wow, didn’t think it would happen, but I totally agree with Michelle. Although I’m as happy as the next guy to get money back, with the deficit that we have there is no need for this shameless political pandering. We are expected to have a mild recession, which is a healthy part of the growth cycle. Without recessions there would be no economic growth. Now we are not even allowed to have a recession? How sad
I’m gonna buy 500,000 Iraqi Dinars & stick em in a safe deposit box. Hey, they can only go up…
If I get only $300, I’ll pick up a lens I need for my photography business. If I get more, the lens and scheduled maintenance on my car.
Truth telling time:
1) Sony PS3
2) GTA IV
Lord knows I need the practice — a guy walking his dog at 5:30am was shot and killed about 5 blocks from where I live.
hmmm. Brutal reality says scratch 1 & 2.
3) a nice gun, comfortable holster and a CCW
If I get one, it’s going to credit card debit. I just signed on a condo (first home) so I’ll be frugal for a long while
To me, the “economic stimilus” plan is just an admission that we are over taxed. So is the “gas tax holiday” proposed by McCain and surprisingly picked up by Hillary.
A *real* economic stimilus plan would cut taxes to the point that the federal government actually RUNS OUT of money and is forced to cut back on some bloat.
Unfortunately, neither party would go for that. Rockefeller republicians – including Bush and McCain – see tax cuts as a way of INCREASING federal income, and nothing more. My money is their power, no mater which “side” of the isle they are on.
I think I’ll be getting some new brakes on my car (apparently, I’m down to 15%, that can’t be good!) then the rest will go to debt and bills. The iphone is calling out to us, but we’ll ignore it’s siren song!
Our public and private debt is so astronomical, only printing money can get us out of the hole. Thus I am spending my rebate as soon as I get it since it will be worth 10% less the following week.
Bush quoted today regarding high gas prices :
“He said he understands the pinch for working families and that some people will cut back on summertime travel. The federal tax rebate on the way to taxpayers will help, he said.”
That’s exactly what he said during the energy crisis in California. The tax rebate comes just in time to pay for higher energy prices. Indeed.
Heh I wish I qualified for the rebate, that is an extra $600 I could use for the house I am looking to purchase.
Since I make to much, it is back to the old-fashioned way, rather then expect free money from the government.
Pay down all of my debts, and stuff enough away to afford the down payment/closing costs.
The really cool thing the bank accepted my counter offer, I hope to sign the addendum/ratify the contract tomorrow.