According to the National Federation of Retailers, consumers are going to spend most of the tax rebate on gas and groceries, not goodies.
Rebate deposits are due to hit bank accounts this week, with paper checks to follow. All this debt-financed loan appears poised to do is offset some of the inflationary pressures on food and gas — pressures which have been arguably worsened by other government policies, such as ethanol subsidies and the war in Iraq. Of course, it’s politically unacceptable to ask us to bear the costs of our own democratically chosen policies, and so we loan ourselves our grandkids’ money and are urged to spend it.
The Consumer Electronics Association predicts some of that rebate will end up as an iPod or a new digital camera, and here’s hoping, but if history is any guide, it will go down as another boondoggle of a government that can’t get out of its own way. (Which is why you should gird your loins for a slow-motion train wreck during the digital transition.)
Correction: In a previous post I noted that I would be putting all of my tax rebate into savings. I have since been informed by the chief financial officer of Scoblete, Inc. that at least a portion of that money is, in fact, going to the purchase of a spring wardrobe. I deeply — deeply — regret the error.