Can Economic Stimulus Package really boost the economy?
President Bush has approved an Economic Stimulus package worth $160-170 billion with the aim to save the economy from an upcoming recession.
What does the Economic Stimulus package include?
The package includes tax rebates for all taxpayers including children too. Taxpayers who file individually will be getting tax rebate checks worth $600 whereas those filing jointly will receive double the amount.
In order to avail this rebate, individual taxpayers should be earning less than $75000 in adjusted gross income. But for married couple, the limit is $150,000. Besides taxpayers, every child will receive $300 in tax credit. The package also includes tax benefits for equipments purchased by businesses and payments to seniors and disabled veterans.
Can it help avoid recession?
It is expected that the Economic stimulus will put $120 billion into the hands of Americans so that they are able to spend it thereby boosting the economy.
However, a recent survey of 1500 people conducted by the American Century Investments has found that 36% of the people have already planned to use the tax rebate in paying off their debts. But a quarter of them intends spend the cash right away. Others intend to spend the money on imported items which will only give a limited life to the economy.
Thus, if consumers save the money or invest it or use it for purposes other than spending then it can hardly save the economy from a recession.
However, a section of the experts still believe that the stimulus package will be able to lift employment by 500,000 jobs. But again, another section feels that the impact will be very short term indeed. So, there are a lot of questions as to whether the package can at all avoid recession. But until and unless it becomes effective, none can predict the right impact it will have on the economy.
Technorati Tags: economic stimulus package, economic stimulus bill, avoid recession, tax rebates
February 18th, 2008 at 1:04 pm
I agree with the experts - who ever they are - this will be a very short term fix. Long term there is very little the Government can really do. It does need to start reigning in on its runaway spending…
February 19th, 2008 at 5:22 am
Welcome to my blog Shailesh
and thanks for your valuable comments.