Tuesday, March 25, 2008
So How Are You Spending YOUR Stimulus Check?
Unless you have been living under a rock, you probably already know that the IRS will be doling out tax rebates as part of Bush's $152 billion economic stimulus package signed into law last month, which hopes to stave off recession amid a deepening housing and credit market crisis. (psst... why doesn't his administration just lower taxes and stop printing and spending gobs of money !!)
The stimulus rebate amounts to about $600 for most middle-income individuals and $1,200 for middle-income couples. Taxpayers must file a 2007 IRS tax return to receive a payment. You also must have a Social Security number and at least $3,000 in qualifying income.
The IRS has published a handy dandy online calculator to help taxpayers determine if they are eligible. Here is another version as well.
Payments will be mailed out on May 2 and continue through July - and if your social security number ends in a low number you'll be getting yours first.
But back to my original question - How will YOU be spending your check?
Go to Walmart and essentially send your check to China?
Spend it on gasoline - and send your money to Venezuela or the Middle East?
Buy a car and send your money to Japan or Germany?
How about buying some fruits and vegetables imported from Mexico or Chile?
It appears that the reality is that few American jobs will actually be created by this plan. The money being rebated won't even help those on the brink of foreclosure on their mortgage because it probably won't even cover one mortgage payment. In truth we manufacture many fewer products here in the USA these days. Even many food products in our supermarkets are being imported. Such is the effect of globalization. Globalization, whose merits can argued either as good or bad, has made it so whatever you purchase doesn't necessarily help out the American economy. So the question remains: how is buying foreign goods with your rebate check supposed to help stimulate the U.S. economy? Many argue that our national debt will increase substantially because of this stimulus package and that when we turn around and buy foreign goods with the money we will only be increasing our trade deficit.
Maybe it really is more of a psychological effect - you know that you receive an nice check in the mail, for essentially just filing a tax return,having a social security number and meeting some income requirements. It isn't even really free money because you're basically getting your own money back.
But anyway, for those not planning to spend it on "stuff" here are some other options.
Some people plan to pay off debt - that's a good idea any way you look at it.
Some people plan to save it or invest it - but then again that doesn't necessarily stimulate the economy.
Some people will use it to pay their state tax.
Some people will donate it to charity.
I'm not sure what I'll do with it - I guess I'll buy something that will increase in value as we head into an inflationary period; like gold or silver.