Sometimes I find an interesting article. Here's one off CNN.com, which is a look at the proposed rebate checks as a stimulus package to boost the economy. I have to say, I really like his idea, with the caveat that it's a good distribution method if we have to do this type of stimulus package.
I found the article really interesting because it was advocating a lesser of two evils type position, which the author didn't even want to be in the position of having to write. The meta context for the author's views and his educated opinion was pretty clear due to the style of writing.
Oh... and I can't help but wonder if the title of his article is meant to be similar to Minsc's quote in Baldur's Gate: "Magic is impressive, but now Minsc leads! Swords for everyone!". Not to sidetrack this into a Minsc thread or anything, so I had better stop there.
4 comments:
Good article. I do think that rebates are a stupid idea, but if the government insists on sending me money, I'm planning to stick it into the rainy day fund. Debit cards could prevent things like that. (Though it wouldn't surprise me if banks and investment companies wouldn't find a way to accept them.)
I don't know that it would actually accomplish what they want it to, even with a time limit. Everything I spend money on except rent and the gas bill is via my debit card already. If I were given a $2000 debit card with, say, a 6-month expiration date, I'd just use it instead of my bank's debit card until it was empty, and put the extra $2k from my bank account into my IRA. And, contrary to what the article says about luxury items, my spent $2k would be going primarily for food, not Louis Vuitton purses.
Lanth -- exactly. What's the economics term for that?
If someone typically buys $20 in carrots every month, giving them free carrots (up to $20 worth) is in many ways equivalent to just giving them money, since the frontiers don't change (under the assumed constraint).
Yes, that's the example I originally learned it with. I remember the example, but not the name of the thing itself. ><
While I agree that that would likely happen with the debit cards for some people, it feels like the actual percentage of them that would be used in that way, compared to saving the rebate check money, would be a lot lower. Since that would help accomplish the stated goal of having people spend more money in order to help the economy, it seems like a decent idea. Plus, debit cards seem a lot more usable than rebate checks.
(Another thought: How many poor people have access for depositing/cashing checks? I assume many who are employed must, as most employers pay employees that way, but I've also heard horror stories about check cashing places that take a large percentage. Is that going to be an additional tax on poor people who get these rebates?)
Interesting, debit cards would also be a bit negative in the justification sense: if people did use L's idea/approach, so that they didn't actually spend much more on normal stuff, it wouldn't be obvious as whoever could track where the debit cards were used wouldn't be able to tell, they'd have a lot of justification for saying it got used a ton for groceries, etc. Of course, the fact that the government could theoretically tell where the cards got used is in itself a sorta spooky thought as well.
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