The AP has broken down the House’s “Ribbate” plan here.
Paul Krugman and I agree that the bill sucks. However, I won’t be washing my mouth out with soap just yet, since I don’t think it is necessary at all and he just whines that it doesn’t include more redistribution of wealth.
My question is this:
I keep hearing that if citizens use this “Ribbate” money to pay down their debts, that that will not “help” the economy.
Why?
Is it because these checks will be for +/- $1200 and won’t put a significant dent in the average household debt (not counting vehicles and/or mortgage) of approx. $9000?
Or is paying off personal debt not a plus for the economy, and why not?
I cannot for the life of me figure out why paying off student loans, credit cards, etc., and getting more money back to the banks for reinvestment wouldn’t be a good thing.
Help a brother out.
The immediate concern for the ‘chattering class’ re: the economy is NOT the huge household debt load. It’s that in order to service that debt load most Americans are having to cut back on consumption spending. Obviously we still have to buy food (maybe not as much), fuel (maybe not as much), and utilities (etc). But once the dollars are gone, as they have been for many moons, the easy credit that allowed us all (NOT) to go buy large-screen TV’s, new clothes, and generally keep the economic ‘growth’ numbers going is gone, so THAT spending is slowing.
Paulson or Bernanke actually said last week that they hoped people would go out and not only BUY, but BUY AMERICAN as we don’t want to just inject $300/$600/$800/etc per adult into China’s economy, we want it to go to American manufacturing (there isn’t any).
Because debit is the gorilla in the corner. No one wants to talk about how bad it is. better to get a new shiny thing. Plus if we were all financially responsible and lived within our means, we would not need .gov to redistribute our wealth for us and that is bad for the .gov. They want us beholden to them not independent.
I have been aggressively paying off my non-equity debit from a stint on unemployment (did not go get unemployment pay) and still saving for my wedding which will be payed off in cash, no debt. Therefore I have no problem with buying a OLL, for a AR-15 buildup later in the year, with my refund. There, I bought American.
Um, replace Debit with Debt. Morning and all that jazz.
I bought American when I bought the Noveske upper! I also bought American when I bought the used truck. But I only buy on approval from the wife and the truck is half her money – we share. 😉