An overwhelming majority of Americans believe that the so-called economic stimulus plan – largely consisting of tax rebates – will not boost the economy. According to a poll conducted by CNN/Opinion Research Corp., a whopping 82% of Americans believe the stimulus package won’t work. This is up sharply from 70% of Americans who said the same thing in February.

The Treasury claims to have sent out nearly 30 million payments totaling $27.2 billion so far – though it’s clear from the comments that most of my readers haven’t seen their checks so far. And the White House believes that those payments will make a difference in the long run.

President Bush’s Deputy Press Secretary Tony Fratto has said, “It will boost the economy – it’s impossible that it won’t. It’s like saying if I pour water into a cup, will it get wet?”

Um, I’m not sure what that’s even supposed to mean.

What most people do agree on, however, is that the money will likely be spent. However, less than a quarter of those polled said that they would spend the money on something that they need or want, which was supposed to be the point. Nearly half will use the money to pay down existing debt. The remainder claim that they will put the money away for a rainy day.

What’s likely to take a large chunk of spending? Gas. Gas reached a record high last week, hitting $3.67 a gallon. And what else? Food. I can totally understand the latter – a small trip to the grocery store this weekend to “top up” our pantry cost nearly $100.

The reality is that as more money is spent on food and gas, less money is spent on other things like new cars, clothing and home improvement items.

I’ve asked before – but in light of recent gas prices and this poll, I’m asking again – what are you spending your rebate money on (assuming that you ever get it)?

Print Friendly, PDF & Email
Author

Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.

77 Comments

  1. If we get a rebate check (’cause we’re totally unsure if we are…yes, I read your post on it…yes, I’m still unsure *laugh*) it’s going to pay down existing debt (*cough*studentloans*cough*) and a replacement windshield for the car.

    The windshield should help boost the economy because we use a local auto shop 🙂

  2. Whenever my rebate check gets here, part of it’s going to bills, and part of it’s going to the cost of gas. I have a child I share custody with, and I HAVE to drive every week, no ifs ands or buts – and the gas prices going up are really hurting our budget.

    My husband needs a new pair of glasses and new shoes, and we’d like some good outdoor furniture. But the reality will likely be that 80% of it will go toward obligations we already have.

  3. IF I get a rebate, I will probably spend about $150 on my at-home business, $50 on a pair of shoes, and the rest on food and gas. Sorry, Mr. President, but have you SEEN the price of food and gas???

  4. Come on already people….spending the rebate on food and gas? Give me a break. What’s that going to solve? We were going to have to pay higher gas and food prices whether or not we received a tax rebate. If you’re so worried about gas prices, why not invest in a bicycle? That’s what I’m going to do. That way I’m not spending anything for gas, and I’m also helping the economy to boot! why not do something with the money that

  5. Keith, pardon my opinionated-ness, but it’s awfully small minded of you not to realize that not everyone can bicycle to work, and since gas and food are already tightening our wallets, extra money is like a Godsend. OBVIOUSLY we will spend it on what we need most.

  6. I finally got my rebate check. I’m sending my son to the eye doctor for his first pair of glasses. We haven’t been able to affored to send him yet. The rest of the money will go into the gas tank and to try to reduce our debt.

  7. I agree with Rachael. We’re all going to spend our money on what we NEED, unless we can afford to spend it on what we want. God bless those of you who can give your money to charity or spend it for what its purpose is, to boost the economy. However, many of us don’t have that privilege. I only have my dog and myself to feed and I am still scrounging for cash. What little I can get back from the government I’ll use for what I need. A girl’s gotta eat, right?

  8. We will be giving one third to charity and the rest will go into our savings account until we decide what the best use is. I have plenty of money for necessities, but I never just go out and buy stuff for the sake of buying stuff. I don’t understand that. I don’t understand an economic stimulus plan that depends on people just going out and buying stuff they most likely don’t need or really even want.

    I don’t know what the solution is or how to boost the economy but couldn’t we try something that makes sense? Maybe curbing free trade and encouraging companies to produce their products in this country and encouraging buying local. This country is full of millions of brilliant people, is this the best idea we have?

  9. Actually, Rebecca, you’ve hit upon a good point. For years, our country’s economy has been “stimulated” by many people spending beyond their means. It is wildly easy to get credit in the US and as a result, a very high percentage of Americans have debt.
    As the economy is winding down – and some lenders are putting the brakes on handing out credit – folks are thinking before they spend which feels like a good thing. But from an economic perspective, it’s not good for the retail sector. That means that the retail and manufacturing sectors suffer setbacks – higher prices and layoffs are the result. It’s not a positive cycle.
    Even if the stimulus gets us out of this current hole, many Americans are facing high debts and the country, overall, is at a record deficit.
    What is the answer? I dunno.

  10. The Bush admin. speaks in terms of macro-economics. Pumping $billions into the general economy will have a macro effect. That’s good old Keynesian economics at work, the type of economics that got us out of the Great Depression. But as individuals we’re concerned with micro-economics, not macro-economics. The country has labored under the fiscal oppression of Trickle-Down Reaganomics for 28 years and we’re now buried in bad economic policy up to the hilt.

    The simple reality is that the $billion stimulus plan is no more than a tiny drop in the glass — hardly enough to get the glass damp, much less wet. Keynesian economics has to be applied consistently to work. The Bush admin. is just hoping to manipulate economic indicators enough so we are not “officially” in a recession at the end of this quarter. Then they can say “see our policies are working” and chant their other mantra “stay the course and give it more time.”

    What most Americans perceive is “too little, too late.” And we are right in that perception. We have another 8 months before a new President is inaugurated and we can (hopefully) start digging out way out of this huge mess. Eight months is still plenty of time for this administration to do still more harm to the economy.

  11. We received our rebate deposit last week. We only got $600 rather than the $1200 we were expecting. I still do not understand how that worked?? But we spent it quickly on getting our bills caught up, gas and groceries. No extras! We do not even have credit cards just a home and car payment. The rest is regular utilities. With the job market at an all time low. Our winter utilities were behind. That took a huge chunk to get them caught up. Now after that great economy rebate boost we received. We are right back in the same boat with the same leak we will again start sinking in. Mind you we are very thankful for that minute to breath a little. BUT… A Job would have been a lot better. My hours were cut way down and my husband has been laid off with no prospects and time running out. So I don’t see that the rebate will save our great economy!

  12. Hi, Kelly. We’re going to put our $1200 (if we get it in time) right back in the mail to the IRS for our Q2 estimated tax! How’s that for an “economic stimulus?”

    (OK, the obvious question is, “Where’s the other $1200 going, that you would have used if there’d been no rebate check?” Well, it’s going to stay in the bank, most likely, so we can pay Q3 and property taxes.)

    Urb

  13. We got our stimulus check right on schedule (May 9) and we haven’t gone crazy and purchased what we didn’t need. We bought groceries and gas. Normal stuff – why spend it just to spend it? The idea that most people will see it as an opportunity to go on a shopping spree really makes me wonder what our government thinks of us. Do they really think that we are all that mindless? Some maybe, but all of us? Then again he did get elected twice, didn’t he?

  14. (Taxman) Mike Reply

    How is this for an economic stimulus package???

    Give EVERYBODY in America a 30% pay raise!!!!

    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.

    THAT would boost the economy all across America overnight!!!!!

    So do I have your ears now????

    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  15. (Taxman) Mike Reply

    How is this for an economic stimulus package???

    Give EVERYBODY in America a 30% pay raise!!!!

    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.

    THAT would boost the economy all across America overnight!!!!!

    So do I have your ears now????

    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  16. (Taxman) Mike Reply

    How is this for an economic stimulus package???
    Give EVERYBODY in America a 30% pay raise!!!!
    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.
    THAT would boost the economy all across America overnight!!!!!
    So do I have your ears now????
    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  17. (Taxman) Mike Reply

    How is this for an economic stimulus package???
    Give EVERYBODY in America a 30% pay raise!!!!
    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.
    THAT would boost the economy all across America overnight!!!!!
    So do I have your ears now????
    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  18. (Taxman) Mike Reply

    How is this for an economic stimulus package???
    Give EVERYBODY in America a 30% pay raise!!!!
    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.
    THAT would boost the economy all across America overnight!!!!!
    So do I have your ears now????
    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  19. (Taxman) Mike Reply

    How is this for an economic stimulus package???

    Give EVERYBODY in America a 30% pay raise!!!!

    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.

    THAT would boost the economy all across America overnight!!!!!

    So do I have your ears now????

    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  20. (Taxman) Mike Reply

    How is this for an economic stimulus package???
    Give EVERYBODY in America a 30% pay raise!!!!
    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.
    THAT would boost the economy all across America overnight!!!!!
    So do I have your ears now????
    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  21. (Taxman) Mike Reply

    How is this for an economic stimulus package???

    Give EVERYBODY in America a 30% pay raise!!!!

    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.

    THAT would boost the economy all across America overnight!!!!!

    So do I have your ears now????

    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  22. (Taxman) Mike Reply

    How is this for an economic stimulus package???

    Give EVERYBODY in America a 30% pay raise!!!!

    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.

    THAT would boost the economy all across America overnight!!!!!

    So do I have your ears now????

    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  23. (Taxman) Mike Reply

    How is this for an economic stimulus package???
    Give EVERYBODY in America a 30% pay raise!!!!
    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.
    THAT would boost the economy all across America overnight!!!!!
    So do I have your ears now????
    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  24. (Taxman) Mike Reply

    How is this for an economic stimulus package???
    Give EVERYBODY in America a 30% pay raise!!!!
    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.
    THAT would boost the economy all across America overnight!!!!!
    So do I have your ears now????
    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  25. (Taxman) Mike Reply

    How is this for an economic stimulus package???
    Give EVERYBODY in America a 30% pay raise!!!!
    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.
    THAT would boost the economy all across America overnight!!!!!
    So do I have your ears now????
    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  26. (Taxman) Mike Reply

    How is this for an economic stimulus package???
    Give EVERYBODY in America a 30% pay raise!!!!
    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.
    THAT would boost the economy all across America overnight!!!!!
    So do I have your ears now????
    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  27. (Taxman) Mike Reply

    How is this for an economic stimulus package???
    Give EVERYBODY in America a 30% pay raise!!!!
    Do you think that would boost your local economy? Think if everyone in America got a raise tomorrow and went down to the store and bought some nice clothes for their children, or some food for the table, or some would even buy a new car (Hybrid of course) or boat, or house, or even a plane if you are already rich.
    THAT would boost the economy all across America overnight!!!!!
    So do I have your ears now????
    I know how this could be simply accomplished!!!!! But I won’t tell you unless you ask me to;-)

  28. Taxman Mike, that’s a horrible idea.

    Two great economist, Hume and Robert Lucas bost postulated that money is neutral in the long run. In fact, this is widely held to be true among economists. Your 30% pay raise is akin to increasing the money supply by 30% of output (input, income, GDP, whatever you want to call it), which, yes, in the short run will stimulate output. But, like always, the economy will self correct, prices will rise, output will fall and we will sink into a recession.

    The goal of monetary and fiscal policy is to stabilize, not to overheat.

  29. A gun seems like a prudent investment given the mess our leaders have made of this economy.

    They tend to keep their resale value, so if it turns out to be a useless item I can always sell it.

    Additionally guns are one of the few things that you can still buy with a “Made in American” label on it.

  30. I plan on spending the money on clothes, food, and camping gear for the summer. I want this plan of Bushes to work, that way if we get ourselfs in this same problem, they will send us money again.The government needs to understand that when prices go up and pay stays the same then we can’t spend as much as we would like. My question is do they feel the impact as we do?

  31. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  32. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  33. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  34. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  35. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  36. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  37. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  38. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  39. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  40. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  41. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  42. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  43. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  44. (Taxman) Mike Reply

    Connor, You haven’t heard HOW I would acomplish this, so how can you really know what it is I am talking about???
    You mean to say that YOU do not want 30% more money in your paycheck; without adding more to inflation????

  45. Mike, if you’re going to say “disband the IRS.” Save it.

    And giving everyone 30% more money wouldn’t work. Everyone would have 30% more and no one would be any richer or better off than they were before.

  46. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  47. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  48. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  49. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  50. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  51. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  52. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  53. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  54. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  55. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  56. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  57. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  58. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  59. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  60. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  61. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  62. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  63. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.

    If no law existed that requires you to give 30% of your hard earned money to the government;

  64. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  65. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  66. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  67. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  68. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  69. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  70. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  71. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  72. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  73. (Taxman) Mike Reply

    No I was not going to say disband the IRS. I was goint to say learn the truth behind the IRS and the Income tax.
    If no law existed that requires you to give 30% of your hard earned money to the government;

  74. i’m gonna get a new ASSULT RIFLE, will need it if the commie-libs get in!

Write A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Skip to content