That's what the Bureau of Labor Statistics reported last Thursday. 49% of the tax rebates were used to pay off debt, and 18% were saved. 3% could not be determined. Just goes to show that there's no quick way to stimulate the economy. It's takes time to get spent.
Capital Gains and Games
Washington, Wall Street & Everything in Between
Edmund L. Andrews
Bruce Bartlett
Stan Collender
Pete Davis
Andrew Samwick
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Will they never learn?
Direct money to states that are laying off workers does quickly stimulate the economy by saving jobs.
Tax cuts do NOT create jobs.
A decade of Bush tax cuts and ZERO net jobs to show for it.
The definition of insanity is doing the same thing over and over again expecting different results. No more tax cuts for the wealthy.
Income and the Propensity to Consume
Thanks for pointing out that report. What surprised me is that the percentage spent did not vary across income. That's not consistent with the view - which I and many others held - that lower-income households would spend a larger portion of the money. Of course, since the stimulus phased out with income, we can't compare with very high income households.
Am I the only one who thinks
Am I the only one who thinks that increasing the savings rate might not have been a bad idea given the undercapitalization of the banking industy? For paying off debt, I think reducing the number of people underwater on their mortgages might have reduced the number of defaults.