What are you going to do with your Economic Stimulus Rebate?

[dreamshark]

My first thought was to just put it in the bank. Not only do I not particularly need it (unless I lose my job, in which case I shouldn't be spending it!), I wasn't sure I wanted to do my part to avoid a recession. The worse the economy looks in November, the better it will be for the Democrats. But I'm starting to have second thoughts about that. I have a bad feeling about this recession. It's going to be very very bad. The effects of the mortgage debacle haven't even begun to hit bottom yet, and the shock waves from the crashing housing market affect every institution in our economy. Add in the effect of soaring gasoline prices, and "recession" may not be a strong enough word. *brrr*

So, there's two directions to go with that thought:
1) Save the money! You'll need it before this thing is over!
2) Go ahead and stimulate the economy with it. Nothing is going to stop this recession, but maybe if EVERYBODY spends their rebate check right away it might ameliorate it a teeny little bit. As I hear the tanks rolling in, I honestly feel slightly motivated to do my little part to slow them down.

The Strib had a great article in the Opinion section today that I would like to endorse: Have Dollars, Will Spend Locally

The author suggests spending the rebate on local dining, local arts organizations, and locally produced designer clothes.
I was thinking of donating mine to charity. I think I'll still do that, but with the "Spend Locally" idea in mind. Local foods shelves and arts organizations seem like the obvious choice.

What do you guys think? Save for the rainy day we all know is coming, or stimulate the economy? And what economy do you want to stimulate: ours or China's?

Comments

sacrifice it to debt

[mizzlaurajean.livejournal.com]

Send it to the credit card ghods.

[guppiecat]

Depending on how the tax refunds work out (looking good so far), I will either use it to completely eradicate the last of one debt or add it to the retirement of the car loan.

Basically, I'm two years away from paying off the car (assuming the current rate continues). I think that, at this point, maximizing the option for cash flow is more important to me that stimulating the economy. That way, if I need it, I can drop the loan payments to the minimum and gain liquidity going forward. Also, if I need immediate cash, I will have a lower debt load, which would allow me to get loans at better rates.

Many of my friends, however, plan to purchase TVs and gaming consoles.

[dd-b.livejournal.com]

I think mine goes to the credit card companies.

In terms of spending locally--not downtown, because of the old stadium tax, and not in Hennepin county, because of the new stadium tax. I'm going to be doing a lot more internet buying when that comes in.

[sraun]

We're probably going to bank ours to cover emergency expenses.

[lollardfish.livejournal.com]

Buy the wife's airline ticket to Europe. Right now, it's looking like Iberian Air is the best deal. So hooray the Spanish economy!

[tesla-aldrich.livejournal.com]

I'm banking mine. My $$$ cushion could stand to be larger.

[skylarker.livejournal.com]

If I haven't got an income by the time it comes I'll be using it to stave off the land-ladies/pay bills.

bank

[quadong.livejournal.com]

Mine will go into my bank account, then into a CD if conditions are favorable. Kelly and I have some $20k of student loans. Since they are interest-free until a year(ish) after we finish school, it makes sense to avoid paying them back until then and instead hide any money we manage to save away to earn a bit of interest. I have no understanding of macroeconomics, and neither do 99.9% of Americans, so I really doubt that strategizing on my part about how to save the economy is worthwhile.

However, I should say that I never treat things like this as earmarked for anything in particular, so when I say "it will go into the bank/a CD", what I really mean is that I'll deposit it like anything else and forget about it as a separate entity. Then at some future point when I'm either considering making a purchase/donation or sloshing money around between checking/savings/CDs, I'll look at our bank balances compared to our credit card balances and decide what to do.

Well, no help for the economy here

[dreamshark.livejournal.com]

If my cohort of LJ friends is any indication, the idea of stimulating the economy with a one time rebate is pretty clearly a failure. No big surprise.

My original assumption when they started talking about it was that most of that money would go to paying down debt, buying food, or making one more desperate mortgage payment.

Since I really don't need it for any of those things, I think I'll pursue my idea of donating it so OTHER people can have food, shelter and neighborhood theater. Now seems like a good time to make a donation to Heart of the Beast Theater for instance. That and a food shelf.

Re: Well, no help for the economy here

[guppiecat]

As I see it, in this bizarre and screwed up economy that we have, paying down debt likely WILL boost the economy.

One of the biggest risks is how our financial institutions have overextended themselves in the sub-prime mess. This has had two direct effects:

1) Those that are in particularly bad shape are going under. This will likely result in general acquisition by larger institutions, resulting in a general consolidation of the industry.
2) Cheap loans have become more difficult to come by. For those with poor credit, even expensive loans may have become impossible. In effect, this will result in an upward shift of the poverty line.

If someone can pay down consumer debt, and keep it down, they may well shift themselves over the new line. If people do it en mass, it may keep the poverty line from rising as high as it might... and keep some of the institutions on the edge from going over. This would help limit the consolidation, which would allow for increased flexibility in the monitory system.

Increased flexibility and better credit will make it easier for people to get the loans they need, which allows them to get real work done, which employees people and drives the economy up.

There's a chance that the plan may work, at least to a limited extent. (Personally, I'd be looking at using the money to directly employ people in improving our infrastructure, but then, I'm not in charge.)

Re: Well, no help for the economy here

[dreamshark.livejournal.com]

I'm all for paying down debt. IMHO, that's the smartest thing almost anybody can do with a windfall. But people who are even close to being in trouble with consumer or mortgage debt are only going to get one month's relief out of a $600-$1200 rebate check, and then they'll be right back where they were. So I don't see it having any systemic effect at all on the economy, although it may buy a less stressed month or two for a lot of people.

Re: Well, no help for the economy here

[mmagidow.livejournal.com]

I like your idea of charity, locally, for food shelves or something similar. I hope that no one spends it so that the current occupant gets a clear message that it is going to do nothing at all to fix the economy.

Re: Well, no help for the economy here

[dreamshark.livejournal.com]

Well, I would hope that the charities would spend it, preferably on the people they are supposed to be helping. But I don't think you have to worry too much about the rebates fixing the economy. It's going over a cliff, imho, no matter what anybody does at this point.

I've done my frivolous part

[(Anonymous)]

I ignored the debt, and bought a PlayStation 3, and a Rabbit Air Cleaner (see allergy post). I found it amusing that George bought me a PS3. So does
that stimulate Japan's economy instead?

Oh well, at lest I can breathe and play video games at the same time now!

Sue G.