Tax Rebates Increased Spending. For Now.
There is a puzzling head on Bloomberg.com today. “Spending Probably Rose on Tax Rebates: U.S. Economy Preview.”
Probably? That is an odd hedge. Of course spending rose with those tax rebate checks. Americans would never do anyting foolish with “free” money like save or invest it. Or even pay the rent or mortgage payment with it. The problem is that the rebate is a one time shot. Once it is gone, what happens then? Not all the checks have been sent out. Rebates checks are still being sent out through September which will probably give the economy a little juice until the fall. And then what?
