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Do you think income tax rebates will help stimulate the economy?

Asked at Massachusetts Street on January 18, 2008

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Photo of David Upchurch

“I think so, but I would prefer permanent tax cuts. That’s what I think would really help.”

Photo of Staci Kemerling

“I think it sounds like a good short-term plan. I’d sure spend the money. But I don’t think it will prevent a recession if that’s the direction we’re headed.”

Photo of Rachel Shanberg

“I think it would, because not everyone knows how to save their pennies. So most of the money will go directly back into the economy.”

Photo of Mike Boring

“I think that the amount of money will be negligible in terms of affecting the economy.”

Comments

absolutelyridiculous 6 years, 7 months ago

Sure...everyone will be out buying HD TV's and ipods! That will help us out for sure!

Sounds like a band-aid repair on a huge crack in the hull of this sinking ship.

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Mike Edson 6 years, 7 months ago

Put it back in to the bank and save it.

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50YearResident 6 years, 7 months ago

The best stimulate: Install a new President.

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alm77 6 years, 7 months ago

I think most people are overwhelmed with payments and would spend any extra money they had paying off debt in order to reduce the payments going out each month. I know that's what we would do. I don't know if paying those things would stimulate the economy or not. My guess would be not.

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trinity 6 years, 7 months ago

i'd love to run out&spend any "windfall" that i may receive, no matter the source. but this just kinda doesn't make much sense, to me, and i'd rather see some other long term measure happen to try&fix things.

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marcdeveraux 6 years, 7 months ago

the great thing about tax rebates and tax cuts for the wealthy is that all that fresh cash would go right up the ladder to those poor rich folk that make up 5% of our population. it has been tried before . the pols want us to think social sec and medicare are the threat. 600 BILLION yearly that goes to Iraq (that we know of) is the drain folks. 2 million every minute! its the war stupid, not the economy.

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RonBurgandy 6 years, 7 months ago

If the money went to low and middle income families.

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OnlyTheOne 6 years, 7 months ago

No, too much 'spendable' income is being sucked up by the Oil companies. An insignificant tax break isn't going to give people enough cash to offset the tremendous drain caused by $3.00 (somewhere in the US) a gallon gasoline. The problem is nobody in government seems to care......... Wonder why?

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schula 6 years, 7 months ago

Can someone tell me the name of the article this is in reference to? I can't seem to find it. Thanks.

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newsreader 6 years, 7 months ago

If you'd read the article on Foxnews.com it stats that the tax breaks would (as of now, nothing is passed) go to individuals earing less then 85k and couples less then 120k. (going off memory, could be wrong). Bush wants 800 per individual, 1600 per couple... either the house or senate wanted 500 and 1000. Either would be a welcome addition I am sure.

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jonas 6 years, 7 months ago

justfornow: Simple, isn't it? It's coming from our children, who will have to pay back the debt, or deal with the multitudes of problems that massive government debt causes.

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Ceallach 6 years, 7 months ago

It would stimulate my economy. Is the related article in today's LJW?

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Tony Kisner 6 years, 7 months ago

Careful R_I - The Bilder's know where you live.....

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sunflower_sue 6 years, 7 months ago

Most people would rush right out and spend it...so, sure! It would stimulate the economy for as long as it took for most people to spend it. (Not long)

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schula 6 years, 7 months ago

Thanks for the link to the article. I am not sure if it will stimulate the economy or not. I think a lot of people will use it to pay off some of their debt.

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sunflower_sue 6 years, 7 months ago

Reality, since when did lack of qualification ever stop us giving our expert opinions on these questions?

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absolutelyridiculous 6 years, 7 months ago

Realtity Check...? And you have a degree in economics? You don't have to have a degree in economics to understand the balance in your checkbook. In context...this is man on the street reactions.

My "uneducated" guess would be that MOST folks receiving a check in the mail from the US government will go and spend it on something other than debt or food, or utilities bill, or mortgage payments (have we forogotten those debit cards to the Katrina victims?).

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juscin3 6 years, 7 months ago

RETICENT_IRREVERENT (Anonymous) says:

This is all the work of the Bilderberg group:

R_I, my hubby has talked bout this group too. It's good to see it come from someone else too.

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nut_case 6 years, 7 months ago

Any time the government wants to give me some of my hard earned money back, I'm all for it - boost to economy or not. Of course I always wish they didn't take so much in the first place - I think it works much better in my pocket than in the government's.

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Keith 6 years, 7 months ago

It will stimulate the economy alright, the Chinese economy.

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sgtwolverine 6 years, 7 months ago

Also, if GM, Ford and Chrysler produced cars that ran on dreams and fairy dust, the US would be The Best Country Ever.

I nominate justfornow's "If GM, Chrysler, Ford..." sentence for the Most Random Sentence Of The Day award.

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beatrice 6 years, 7 months ago

Will it be enough to buy a house, or at least buy down a sub-prime loan? No. Then I'm afraid it won't have much of an impact.

Blue, if I can't poke fun at you gun-types here (i.e. anonymously and from a distance) then when can I?

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hottruckinmama 6 years, 7 months ago

I would take it!! But I doubt it will help the economy longer then about 2 weeks. I heard on the Tv the other day that the average family owes about 20 grand in credit cards and their average house payment is about 1000 a month. I don't know how they fit a car payment in. Not to mention the poor boneheads that have a couple of payday loans out there floating around. But anyway 1600 would amount to about a drop in the bucket against that.

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craigers 6 years, 7 months ago

Does anybody know when the rebates would be effective? Would it be right after the vote or for the 2008 year? If it is for the current year, then it won't help the economy one bit right now, since we wouldn't get the money until next year anyway. If it is right now, then I would say it might have a small impact at first, but depending on the next couple years of legislature for taxes. Who knows what Congress will do next to make taxes higher. In Lawrence we could use the money to pay our increased property taxes for poorly managed school systems and city.

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RonBurgandy 6 years, 7 months ago

craigers - I don't know for sure but I believe I heard that they were trying to have it implemented by the summer. I could be wrong, but that is what I think.

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newsreader 6 years, 7 months ago

p>Foxnews.com reports that the proposed plan is to mail the checks out around June or July.

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KSChick1 6 years, 7 months ago

I already filed and have had a plan for months (basically since I received and spent last years refund) to spend this years refund. I am paying a little on debt, buying tickets and paying for a hotel room for vacation, doing household repairs (new toilet), and am paying a once yearly bill so I don't have that payment every month. I'm also going to buy new shoes for me and the kidlet and do some stock-up shopping so I'm not nickelled and dimed to death through the year for toilet paper, paper towels, dish soap, laundry soap, trash bags, shampoo, conditioner, etc. Does any of that have the potential to stimulate the economy?

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thomgreen 6 years, 7 months ago

I'd have to agree with Jonas. All this would be is a short term loan that we or our kids will have to pay back ten fold in the future. But, there is something to be said for stimulating the economy through an influx of cash. I believe it was shown through Reagonomics that the trickle down effect doesn't work. People that have money, upper middle class and above, tend to save these tax refunds rather than spend them. But people in the middle class and below tend to spend the money, rather than save it, thus providing a short term boost to the economy. That boost can help in consumer confidence, which, in theory, will help keep the economy going in a positive way. So, the real question is, is it worth getting an extra $800 now, if, in the long run it might cost you $8000? As a country, we tend to go for the now, rather than thinking of the later. That's why the average household is carrying, according to what hottruckinmama, is carrying 20K in credit card debt, a huge mortgage payment, and even a car payment.

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Mkh 6 years, 7 months ago

While I am never against any kind of a tax break, I don't think this will save the economy from the looming disaster it faces. Will it help? Gosh I hope so. But the bottom line is this country is hurting, and we are just at the tip of the iceberg. Next year our trade debt will balloon even further, the dollar will slide even lower, and the government's spending will increase ever more.

These are the the things which must be immediately fixed to help the economy recover. There is no band-aid which will work on this deep wound.

And yes R_I is correct...this is the Bilderberg agenda coming to pass. Enjoy.

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labmonkey 6 years, 7 months ago

I could be wrong, but I thought this was an advance on 2009's rebate...not a tax cut. Since we are buying a house this year, that could go toward closing costs or a lawyer, but what I would like to see is a HUGE cut in spending. Lets give Presidents the line item veto to cut out all of the pork that gets added to legislature.

As for we, the little people Americans....how about instead of going to Walmart, research a little bit and do your damnest to buy American made goods. It may cost a little more and may be hard to find such a product, but you feel better about your purchase because you haven't sold your soul to China and you are actually helping out lower to middle class Americans whose jobs rely on making those goods.

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Richard Heckler 6 years, 7 months ago

This is a neocon Bush deceptive feel good tool. Today on radio it was stated that since 2001 the average income has dropped. A rebate eh.... so where do we send the coupon? http://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_americans

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purplesage 6 years, 7 months ago

hahahaha! Excuse me. I was laughing at Sen. Obama's attempt to distinguish between his plan to not collect taxes and Sen. Clinton's plan to collect them and send a little back. He would have us believe hers is a government handout and his isn't. I missed the distinction.

This much I know. When one of them (or, long shot Sen. Edwards) gets elected, taxes are going to go up. So, if they send you $250 now, you had better invest it well to pay all the new taxes that are on the horizon.

We need two things: 1) A true reduction in government spending and 2) Relief from a burdensome, regressive tax system.

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Mkh 6 years, 7 months ago

logicsound04 (Anonymous) says:

"A tax break is not the best way to stimulate an economy because it utilizes money that is already in the market.

If the government REALLY wanted to stimulate the economy, they would lower interest rates. That would actually infuse NEW money into the economy. Of course, lowering interest rates too drastically can lead to high inflation, which will eventually lead to another recession"

No, No, No! This is the problem. The interest rate cuts and the influx of new money into the banking system is exactly the reason we are in this mess. However, the Fed is doing exactly what you are calling for, and on Jan. 29th they will most likely be cutting the interest rate significantly...which will likely cause the dollar to fall 2-3% in a day. Further crushing the stagnant economy and virtually stealing money from anyone holding dollars, causing further inflation...

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jumpin_catfish 6 years, 7 months ago

Me keeping MORE of the money I WORK for will be a great idea and giving me some of it back now can't hurt.

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Mkh 6 years, 7 months ago

If the Fed REALLY wanted to stimulate the economy they would end their unconstitutional control of the nation's money supply, end the unconstitutional income tax, and the fiat currency of the central banking system all together...

but that of course will only happen after the complete collapse of the middle class and a true populist revolution emerges.

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jonas 6 years, 7 months ago

"but that of course will only happen after the complete collapse of the middle class and a true populist revolution emerges."

Yep, that's when life really starts to suck. Going by historical occurances, at least.

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Mkh 6 years, 7 months ago

Amen to that R_I.

I'd say we could use a storm about now.

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Kathy Getto 6 years, 7 months ago

Keith (Anonymous) says:

It will stimulate the economy alright, the Chinese economy.


Bingo!

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Panhandle 6 years, 7 months ago

The dollar is now worth $.52 against the euro and less against the pound. Would this make it worth $.53? Bush, who's never in his life had a real job, has ruined the economy. Schools are falling down in Kansas, but we're building nice ones in Iraq. I want all my tax dollars back that he has blown in his pointless war.

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50YearResident 6 years, 7 months ago

The only for an incompetent President to keep his job is to share some of the Governments wealth with the people to make them an accessory to his mismanagement of the treasury's assets.

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Richard Heckler 6 years, 7 months ago

Bush has done this rebate trick once before. Stimulating the economy will require major steps: Stop electing the PNAC Republican war machine to elected positions : a. http://www.ecapc.org/pnac.asp b. http://www.oldamericancentury.org/pnac.htm c. http://www.informationclearinghouse.info/article1665.htm d. all top republican candidates including the house and senate subscribe to this e. the DLC Clinton /Lieberman types subscribe to this f. the world has no respect for the republican PNAC war machine stop the mideast invasion - bring all the troops home. Taxpayers cannot afford this stupidity a significant pay increase to the middle class - this inceases spending and they pay the bills Demand Nationa Health Insurance - this will save tons of money for 95% of citizens * Increase expenditures in public education and Vocational-Technical Education

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JJE007 6 years, 7 months ago

Wow. The Gov is using its payday loan to give us a payday loan? AWEsome. I'll invest in pork bellies, beans and metals. Yep. I expect can'o'pork'n'bean stock to erupt in the bull$#!+ market. Damn. Botulism...

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JJE007 6 years, 7 months ago

Government Waste Botulism?~)

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Mkh 6 years, 7 months ago

Blame David Rockefeller and Alan Greenspan...for starters.

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wysiwyg69 6 years, 7 months ago

it will not stimulate the chink economy if you look at where it is made before you buy it

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Mkh 6 years, 7 months ago

Merrill,

"Demand Nationa Health Insurance - this will save tons of money for 95% of citizens"

Yeah Right, and monkey's might fly out of my butt.

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Godot 6 years, 7 months ago

This would be like putting a band-aid on a gangrenous wound and saying, "Now you will be all better."

The cause of the current recession and impending depression is excessive debt. If people receive a rebate from the Feds, it should go to pay down their debt. But most probably will spend it. So it may offer some short term relief, that is all. The local governments will appreciate the additional sales tax revenue, no doubt.

The real bailout will be when, as Chuck Schumer promotes, the limit on FHA mortgages is increased to over $700,000. That certainly is not something that will help out the middle class. That is a taxpayer bailout for the speculators and financial institutions whose immoral business practices got us into this mess.

Regarding timing, Chuck Schumer says the "stimulus package" must be implemented immediately, claiming that if it doesn't happen until June, it may be too late. Question: too late for what? Answer: Financial armageddon. Another question: why did Congress wait until it was too late to do something? Answer: incompetence, cowardice, greed, corruption.

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Godot 6 years, 7 months ago

If you are contemplating making a big purchase, perhaps you should wait. Deflation may be on the horizon.

http://www.financialarmageddon.com/2008/01/the-wrong-flati.html

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Mkh 6 years, 7 months ago

Sounds like there may be tremendous turmoil coming soon if the big Insurance companies who have been insuring all of these failing home lenders are forced to pay up Billions in capital that they simply do not have. Jim Kramer warms that "When" (not if) this happens there will be a 2,000 point drop and they will Not Be Able to Open the Market the next Day!

Godot, what do you make of this?

http://www.youtube.com/watch?v=8lDxQ_0lPYQ

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GretchenJP 6 years, 7 months ago

Wow, when did they put all those books up on Massachusetts Street?

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Godot 6 years, 7 months ago

MKH, I don't know what took Cramer so long to be honest about what was happening. Was he stupid, or did he have other motives, such as covering his own positions? He kept pumping the market through the fall, luring more suckers to invest in market while the market was climbing, when it was apparent last spring that the mortgage re-sets were going to come crashing down around everyone's ears. Follow Cramer's advice, and you will find yourself buying high and selling low.

Cramer is just floating a trial balloon with the talk of a Resolution Trust, seeing if people scream about it. That is what bailed out the Savings and Loans in the 80's, and now, 20 years later, they are back with their red hands out, and they have brought their buddies with them.

The Federal Government does not have enough money to bail out the banks, the mono-line insurance companies that insure bonds, the companies that back personal mortgage insurance, the credit card companies and the car loan financiers, but those rogues will be first in line when it comes to receiving Federal funds. Individual borrowers will be far, far down on the food chain.

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Mkh 6 years, 7 months ago

Godot I understand that Cramer has been full of BS for a while on what is happening, along with the rest of CNBC. However, like you mentioned, he is finally telling the truth on this specific crisis...which leads me to believe that it is going to occur sooner than later.

I agree that the Fed in no way could even possibly bail out all of those "rouges", but where does that leave us? "Far down the line" as you say is correct, but in this environment that seems to be the riskest position of all.

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