My Tax Rebate Check Dilemma

There has been a lot of discussion about these checks. I have heard from economists while listening to NPR discussing the various merits of this plan and whether or not it will actually work as intended. I believe that they just might. But probably not necessarily by people just buying things but, because of the psychological boost it may provide to our collective psyche. What I find interesting is the self-fulfilling aspect of an economic recession. Everywhere you turn, there is talk about how bad things are and, it is my opinion that half the problem may be that people believe that things are bad whether or not they are personally effected. It is all they hear, so they get nervous. For sure, some people are in a bad situation from the sub-prime mortgage fall out. And, prices on many key products have gone up, like gas and food.

From my point of view, these US tax rebates check are a little controversial, even manipulative but, what is done is done and soon I, like millions of other Americans, will be receiving a check from the US government. So, the question I have is, should I spend it or save it? And, by save it, I don’t really intend to save it. What I mean by save it is to pay down one of my many bloated credit cards. For me, at this point in my life, that is saving.

In my case, I will be receiving two thousand one hundred dollars, six hundred for being married and three hundred for each of my children. There are certainly things I would like to buy with this money, things I have put off buying for one reason or another. Most of the things I would like to buy pertain to my home. I need a new couch, I need new window blinds, and I would love a new electronics like a flat panel TV and new DVD player. Well, ok, the truth is I don’t need these things, I want them. I can live with my old couch, old TV and such. I guess the only thing I can justify is maybe the new window blinds and they are for my kid’s bedrooms.

I could also do something extravagant like take a trip with my wife. Our anniversary is coming up and that would be a nice present. The funny thing is, I was just fine with how things were and now that I know I will be receiving this small windfall I am almost troubled with deciding what to do with it.

On a personal note, the most logical and responsible thing to do with this money is to use it to pay down debt. That said I have to ask myself if I have a responsibility to use this money for what it was intended, to stimulate the economy. I heard one economist state that if most Americans use this money for consumption; it would help to stimulate the economy. But, I also have a problem with our economy’s frightening reliance on consumption and it seems clear that even our global economy depends on American consumption.

In the end, of course, I am going to do what feels best for me. I do care about our economy and the plight of people who have been significantly impacted by these times. So, I will strive to find the middle ground and get what my kids need and ‘save’ the rest.