A second simple question about the Rebate we're all getting from the IRS.

[hedgehog]

Since the rebate is not an advance of our refunds for 2009, isn't the Government just printing money and distributing it to everyone to spend? Isn't this a simple recipe for goosing inflation?

[MercutioATC]

1. Yes, and Yes.

[hedgehog]

2. Well, at least that might help me pay off my credit cards!

Eventually.

[MercutioATC]

4. It will, except that everything you buy is now going to cost a little bit more.

...which kinda spoils the value of getting a few hundred bucks in cash.

[hedgehog]

5. Actaully, I'm thinking of the longer run. If we get a burst of inflation,

loans taken in old dollars will be cheaper to pay off. That's only true, of course, if wages keep pace with prices.

[MercutioATC]

6. There's the rub...wages don't keep place with inflation.

...especially in a recessionary economy.

By the time the economy turns around again, most of the damage will have been done.

[rateyes]

3. Yep.

[PetrusMonsFormicarum]

7. An economist friend

tells me that A) the average American will be spending just about $600 more this year on gas, milk, and bread, and B) the money to pay for this "rebate" is coming from loans from China, Dubai, etc.

So, the rebate check is going to do exactly what BushCo. wants it to do: keep Americans in a holding pattern, and mortgage the next generation before they are even considering colleges.

Oh, and if you spend your $600 at WalMart or at the pump, you're basically giving it right back to China, Dubai, etc.

When will people begin to see the true hidden costs of things?

[HughBeaumont]

9. Kind of answers the Repuke question: "If yew don't want it, why don't yew give it BACK?"

Um, if we buy a product, we essentially ARE "giving it back".

I plan to sit on it and buy a mutual fund when the time is right. I'm getting off the "constant consume" bandwagon.

[PetrusMonsFormicarum]

11. yeah . . . but

in most transactions, the buyer is walking away with something they did not have before: goods, services, a warm feeling, etc.

Personally, I am still torn (and probably will be until the check arrives): should I spend it on more goods and continue to be part of the problem? Should I sock it away and have the Fed accountants wonder where it got to? Should I cash it over to the Nature Conservancy? How about 600 Powerball tickets (boy, THAT would be frustrating!) Or should I simply pay down some bills and have it disappear into the gaping maw of our society's orgy of consumer debt?

Makes me think of the Weimar Republic with people rolling wheelbarrows full of devalued currency to the market for a loaf of bread.

[notesdev]

14. pay your bills with it

starting with your credit cards, if you have any.

You're going to end up paying for this check many times over through national debt service alone, so don't get too happy about the whole deal. It's a one shot deal so there's no more sensible way to use it other than to reduce debt or increase savings.

[JoDog]

15. My sister plans on using hers

to pay a bankruptcy attorney. Get in before the rush.

[sinkingfeeling]

8. First, not 'all of us' are getting a rebate. Then your question has been answered by MSNBC's expert.

http://www.msnbc.msn.com/id/23957476/

Is China paying for U.S. taxpayer rebates?

I‘ve been told that the special rebate the IRS is sending out this year is funded by borrowed money, money that has been borrowed from two or three countries, including China. Do you know where this money is being obtained?
— Kay R. Concordia, Kan.

"Since Congress and the White House didn’t raise any new taxes to pay for the roughly $150 billion being spent on tax rebates and other “economic stimulus,” the government has to borrow that money; some of it likely came from China. But tax revenues and proceeds from borrowing all go into the same federal spending pot, so it’s tough to unscramble the egg. Your rebate may have been funded by Treasury debt sold to China, or someone else — or from someone else’s tax payments."


More at link

[Cleita]

10. You've got it.

It will also make it easier for our government to pay off our debts to China et al. This is what the Weimar Republic did in Germany paving the way for Hitler to take over because unhappy Germans found their life savings and retirement funds practically worthless. It seems the neo-con's timing for the effects to run into the next administration for them to get the blame is pretty cynical and clever of them.

[PatriotJack]

12. Pay your DEBT

I've been telling anyone I can that the only sensible thing to do with the rebate is to pay off as much debt as you can with it. Blow away a credit card (then cut it up).

[notesdev]

13. This is the 'bread' part

and the circuses are provided by American Idol.

[backscatter712]

16. My suggestions:

As stated, pay down debts with it - that's probably the wisest thing to do with the money. If you don't have debts to pay down, invest it - conservative stuff like CDs for the short term until the economy stops crapping itself, stocks when things get better.

Either that, or spite the Bushies and donate it all to Democrats for this election...

[GoesTo11]

17. Now why would they do that?