I’ve written a few posts over the last few days, but, unfortunately, my schedule hasn’t really let me post them (I have a tendency to write posts when I’m away from home, using other people’s PCs, and I save everything on a USB flash drive to post later). I’ve backdated a few posts and put them up now, so if you see a post that you don’t remember seeing before even though you’ve been here since the date on it, that’s probably why.

As everyone has no doubt heard by now, the federal government has come up with a plan to potentially jump start the ailing^[a] economy by giving tax rebates to a large percentage of Americans.

A lot of people are already talking about how they’re going to spend this check from the government, and many of them seem to view this as a giveaway of sorts. For most Americans who will receive these rebates, this is not the government giving you money. This is the government returning money that it has already taken from you^[b]. That’s a very meaningful distinction in my mind, and I find it somewhat depressing that so many people tend not to see it that way.

The question is, what will this really do for our economy? In the case of my check, not much. I have every intention of putting the check either toward paying down my credit card debt or into the bank to bolster my savings a bit. In the larger sense, I think any real effect the rebates have will be largely due to their emotional impact rather than their financial impact. If it makes people feel a little more confident and encourages spending even beyond the rebate checks, then the overall effect is good. If people spend the money and still feel like the economy is faltering, then the effect will be minimal at best beyond a spike in spending around the time period that the checks go out.

Still, the government giving me back some of my money is always welcome, so I’m pleased. Now if only they’d cut spending down to the bare minimum, supporting only those functions government is actually good at (defense, law enforcement, infrastructure) and cut taxes accordingly, we’d see some real economic booms.

1. Whether the economy is actually “ailing” or not is a point of debate — it’s admittedly growing slower than it has in years past, but it’s still growing. That’s why it’s so funny when adults like the writers of the linked article (who, presumably, passed public school social studies classes and should know better) talk about the fact that we’re “teetering on the edge of recession”. A recession is two or more quarters of negative economic growth, and since we haven’t had even one such quarter (or even one such month, as far as I am aware), it’s early to be crying about a recession. [↩]
2. On the other hand, if you’re one of those who earned more than $3000 last year but did not earn enough to pay taxes, your check is a giveaway. You should thank a neighbor or friend or acquaintance who did pay taxes — that is effectively their money that you’re spending. Spend it well. [↩]