That's where the government can help right now. Investment in infrastructure and education may pay off in the long run, but those jobs and projects take time to create. What small businesses need, immediately, is healthy demand for their goods and services.
The rebate checks of last year aimed to provide just that, but most Americans saved the money or used it to pay down debt. Less than 20 percent went to bolster consumer spending. There's little reason to expect more from the proposed $1,000-per-household tax cut in the current stimulus bill.
A better choice would be something Americans are likely to spend, and without huge logistical headaches: a gift card. By sending every taxpayer a $2,000 debit card, the government stimulates spending directly. The card doesn't get deposited with a bank, a step that greatly reduced the use of last year's rebate checks for new spending, and with a defined expiration time, perhaps a year, the program could help precisely while other programs get underway.
And such cards allow people to spend where they find it most valuable, obviating debate about where the government "should" spend money. Consumers will choose what things they need most, and, whatever those are, they would be more affordable.
I'm down with this idea. I just got a $100 rebate card from AT&T for something I bought six months ago. What I had to go through to get what they promised me is a story all by itself, but I finally got it. The point is, it has to be spent. I can't put it in the bank or cash it. It's just money back that I already spent, but spent it will be, tomorrow at Costco.
Give everybody back a reasonably significant amount of money and let them spend it on whatever goods and services they want, but not save it or pay down debt. It will get into the economy in a New York minute. Call it 'trickle-UP economics'.
No comments:
Post a Comment