Posted on 08/20/2003 4:47:07 AM PDT by AntiGuv
SAN FRANCISCO (CBS.MW) - Almost half of Americans who've received tax-rebate checks have used the money to pay off their debt -- not spent it in the mall, according to a recent CBS News/MarketWatch poll.
Thirty percent of those surveyed said they've received their rebate checks and of those, 46 percent said the money went to pay bills. Another 29 percent said they've saved or invested the rebates, while just 18 percent said they spent it.
The results are at odds with the Bush Administration's hope, and possibly that of retailers, for the tax rebate: that Americans would spend the money to help stimulate economic recovery.
The statistics are similar to the results of another poll conducted two years ago, during the first round of tax cuts. In 2001, 43 percent of tax rebate recipients said they used their check to pay bills, 32 percent saved or invested the money and just 15 percent spent it.
Two consumer credit reports released last week dovetail with the poll's findings.
The Cambridge Consumer Credit Index, a monthly survey on credit card use, fell to a reading of 55 in August from 60 in July, indicating that consumers are less willing to take on new debt.
And a report from the Federal Reserve showed a rare decline in consumer credit for the month of June. Total consumer credit, excluding mortgage-backed debt, fell $400 million in June to $1.761 trillion, the Fed said. See full story.
As for the people surveyed in the CBS poll, about 55 percent said they had not yet received their rebate check, and about 13 percent of the respondents said they did not expect to receive one.
Those who did receive it were no more likely than those who didn't to say the recent tax cuts would help create jobs.
But the tendency to pay bills rose as household incomes fell. Of those Americans with annual household incomes totaling less than $50,000, 55 percent said they used their tax rebate to pay bills. By comparison, in households bringing in $50,000 or more, just 34 percent used the funds to pay bills. More of those in the higher-income households reported they either saved the money or invested it.
CBS News conducted the poll among a random sampling of 798 adults across the nation interviewed over the telephone on August 11 and 12. The margin of error is estimated at plus or minus four percentage points.
I don’t have a clue what's running through you mind with the vanity accusation.
But regarding growing government, the fiscal "size" of government is not measured in political terms by its budget, but rather by its budget relative to GDP. And in this sense, it's impossible to grow government long term while lowering takes (short of the government printing and spending the money).
The myth of Republicans growing federal government is a fraud perpetrated on the ignorant by the kooks.
but no matter...money paying off debt frees up most people to buy more.....
If you knew half as much as you claim that I don't, you'd be able to contradict/disprove something, anything, that I said. Since you apparently can't, I suggest you loose the attitude and start thinking independently. You're misguided at best.
Eggsactly Batman!
Further when a consumer pays of debt it usually means they are paying off debt on liabilities, when a business goes into debt it is usually for assests which if done properly is a good thing!
Compensation? The bank spent the money when it loaned it to you, and you are spending it when you pay it back, with interest, which cannot qualify as anything other than spending.
The velocity of money is the frequency the same dollar is spent. The multiplier-effect deals with money creation, which may or may not have a bearing on its velocity.
You have some basic misunderstandings of the definitions of loan, borrow, spend, etc.
You might start with Campbell R. Harvey's Hypertextual Finance Glossary
The velocity of money is the frequency the same dollar is spent.
Yes. I said as much - that when the same 'money supply' is spent velocity increases (not when debt is repaid) but when money (borrowed or saved) is spent, and I gave a non-loan cash example where the velocity increases but not the multiple.
The multiplier-effect deals with money creation, which may or may not have a bearing on its velocity.
Yes, I said they were related but not the same, and I said the multiplier effect happens when the same 'money supply' is loaned/borrowed (not spent, but loaned & borrowed - spending does not multiply money - only borrowing via a fractional reserve banking system multiplies the money supply).
Liberals are so stupid.
spend [O.E. spendan borrowed < L. expendo or dispendo, to expend, to dispense.] To expend or pay out, as funds or wealth. --v.i. To make disbursements or expenditures.
--Webster's
Note that the word is tied to the notions of "paying out" and "disbursement," both characteristics of a loan. Also please note that this link goes clear back to the word's Latin/Old English roots, including the strict definitions "dispense" and "borrowed."
In sum, and using the common definition, a bank "spends" money when it loans it to you, just as you "spend" it when you pay it back with interest.
Yes, we disagree on the definition of spend.
Maybe this is just a miscommunication. I don't know if this tax cut will impacts the spending of shaken consumers. But I'm not aware of anything inherent to supply side theory that contradicts the understanding that a shaken economy suffers from a kind of chicken or egg circle, with industry resisting hiring until consumer spending recovers and consumers resisting spending until the job market improves and around we go again. That's not the full story, but it's reasonable to believe that it's a subplot.
I don't know why a supply sider would disagree that more consumer spending is good for the economy. Internet bubble pops, democrat demagoguery and terrorism have a huge impact on behavior. Behavior of consumers as well as investors is not entirely rational, and when the confidence and activity of either is high, it's good (unless it's fanatically high).
Bush sold himself as a moderate/compassionate conservative from the beginning. This tax cut was difficult enough to get through without having to be brutally honest about its limits. Whether or not exceptional honesty, rather than Keynisian arguments for incremental supply side programs (triangulation), is productive or not is beyond either of us to know with certainty. With Democrats promising economic collapse due to the "crippling cost" of the cuts, I tend to think that calling it of little benefit would have ended its chances, along with any psychological effect on consumers.
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