January 18, 2008
What would you do with an extra $800 or $1,600 refund?
The stock market is all over the place lately, way down from the levels it was at last October. We have the media screaming recession, which may be true. I don’t think we will truly know if we are currently in a recession until months after it actually happens. The economy could be in trouble if something doesn’t happen.
Today President Bush plans to announce an economic stimulus package to help boost the economy. What would be part of this program is a tax rebate of $800 for individuals and $1600 for married, as long as you at or below the household income threat hold of $85k individual and $110k married. So what would you do with the money?
The government wants you to jump for joy like you won the lottery and go out and spend it. Sure, spending it will be a positive thing for the economy, but is that the best thing to do? You could instead put it in the bank and save it for when you really could use it. While it doesn’t stimulate the economy as much as spending, many people have no savings anyway. It could be used to help pay off some debt and help increase the net worth. I don’t think there is anything necessarily wrong you could do with this money.
I think the real thing we have to look at is will this package really help our economy come out of a recession, if that is what we are in. Nobody likes to pay taxes and an auto magic refund of $800 to $1600 is icing on the cake. Like all good things that come, birthdays, bonuses, tax refunds, we just have to be patient and see what will happen when the time comes. As far as what I think we’ll do with this money if we do get it, probably a bit of spending, saving, and paying debt.
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