Yesterday, President Bush visited a small business in Virginia and discussed his plans for reviving the economy. To make the economy “stronger than ever before,” Bush argued, we must wait for people to spend their rebate checks:
There’s a rough patch right now in our economy, but I’m confident in the long term we’ll come out stronger than ever before. One of the most decisive actions a government can take is to give people their money back so they can spend it, and that’s exactly what we’ve done. In the second week of May, a lot of folks are going to be getting a sizable check. And I’m looking forward to that day, and I know they are as well.
Bush may want to start coming up with other options to stimulate the economy. While taxpayers have traditionally spent half to two-thirds of their rebate checks, this current economic situation is unique. “We’ve never done this in a period when American households are so deeply indebted,” said Economic Policy Institute senior economist Jared Bernstein. “While [saving the rebate] is a valiant thing to do, what you want them to do is spend it.”
Poll numbers bear out this prediction. A recent CreditCards.com poll finds that almost half the American public plans to either save their rebate checks or use them to pay off debt:
Results from a CNN/Opinion Research Corp. poll were even more dramatic, with 53 percent of the public planning to “use their rebates to pay off bills” or “put the money in savings.”
This check, however, may be all the American public receives from the Bush administration, which has been willing to bail out irresponsible financial institutions but do nothing for struggling homeowners.