Higher or Lower SS#s?

[BOB W]

I believe that any money that the government gives out that they will get most of it back in taxes. Maybe some astute economist on the board will know what the recycling of a $ will bring in taxes collected in a case like this. I do know that net profits' get taxed and when those profits are spent it generates profits for the next person and it gets taxed. The cycle goes on and on. This cycle will end up in taxes collected and back to the government at some multiple that I am not aware of.

So bottom line, some, most, all or more than the original funds are brought back to the government, if spent.

I know that it may hard to understand by some but they can't look at it like you do your own money. When you spend your money it is gone. When the money is spent by governments it works it's way back to them through taxes.

[joanmcq]

How about all the $$ spent informing us about the rebate, and developing the form so the seniors can get the rebate, and processing the checks for everyone that doesn't trust direct deposit, and the postage, and paper, and the letters they are sending out explaining the rebate, on and on ad nauseum. Does that come back in taxes too?

[BOB W]

How about all the $$ spent informing us about the rebate, and developing the form so the seniors can get the rebate, and processing the checks for everyone that doesn't trust direct deposit, and the postage, and paper, and the letters they are sending out explaining the rebate, on and on ad nauseum. Does that come back in taxes too?

I guess it all depends on the multiple factor. Don't get me wrong, I am not in favor of waste but I do believe in spending the stimulas payments. To save or pay down personal debt, it would be a waste of government money and be considered selfish in regards to its intent.

So if a complainer thinks it is wasteful and banks it, they are the one wasting the government's money. Not to mention the effect on OUR economy.

[JohnH]

Economists

Most economists will tell you that what you are describing is the accelerator & multiplier effect, but they will disagree violently on what inpact it has, or even if it's a good thing to try and measure with any degree of accuracy or confidence.

Even the money spent on advertising & promoting the rebate does have an economic effect, but it's really hard to quantify since nothing tangible is being produced. However, before we get too upset over IRS employees doing nothing but pushing paper around, let's remember that we tax preparers don't produce a tangible product either (especially the paperless offices).

As I see it, the biggest problem with government is that it is clumsy - it simply can't allocate resources in an efficient manner. It will do some useful & necessary things such as maintain some sort of order and provide for the common defense, but even those tasks are performed inefficiently and at a very high cost. So any money it collects that is returned to its true owners is a good thing. We aren't perfect decision makers either, but we are much better allocators of resources because we almost always behave in our own best interests, which makes our economic system more efficient that it can possibly be if it is managed by government.

[joanmcq]

The problem IS that we allocate resources based on our own interests, which usually is a selfish motive. So I don't want to support libraries because I don't read, even though it is in society's best interest that books are available to the masses, or its in my best interests to not put a scrubber on my power plant because I don't live there and it eats into profits although all the kids that live near the plant have resperatory illness which costs society as a whole lots of $$ in health care and lack of productivity, etc. External costs are an econonmic reality, but its the rare person/company that can look beyond its own bottom line to consider what is the greater good as a whole and in the long term. One of the biggest problems in our economy is the attention paid to short term results (spend now! instant gratification! profit now!) and little paid to long term effects (the deficit, the environment, long term productivity vs. daily share prices).

[JoshinNC]

I'm not from the West Coast

You guys must be from the west coast.

and I can't figure out what you're saying. There is no reason for our govt' to go out and borrow money from the Chinese, who are the largest holders of American debt, in order to prop up an economy that is slumping because liars got loans that they could never make the payments on. Had these "liar's loans" never been entered into half the slump we're in now wouldn't exist. I realize that the economy, especially housing, on LI is one of the worts in the country, but that is no reason for me to go out an spend money for the sake of spending it.

[JoshinNC]

This rebate is not a return of your money

Anyone who doesn't think they should keep their rebate can send it back in. The method is clearly spelled out in the 1040 instructions, so I don't know why there would be any complaining about it. It helps anyone genuinely concerned about the deficit to assuage their guilt, and you even get a tax deduction for the gesture. What could be simpler?

As for me, I see the rebate as a partial refund of the amount paid for a terribly overpriced and inefficient service (government). It would be a good thing if we received more of them, or better yet make the rebate permanent and then force the politicians to get by on the reduced revenue.

This is simply the govt' borrowing money to give to people who may or may not have a real tax liability. This is why I am with Clark Howard that this bill should have been titled the Politician Protection Act of 2008.

[BOB W]

and I can't figure out what you're saying. There is no reason for our govt' to go out and borrow money from the Chinese, who are the largest holders of American debt, in order to prop up an economy that is slumping because liars got loans that they could never make the payments on. Had these "liar's loans" never been entered into half the slump we're in now wouldn't exist. I realize that the economy, especially housing, on LI is one of the worts in the country, but that is no reason for me to go out an spend money for the sake of spending it.

But that is what the government is ask you to do. Spread the money around. You can do it better than they can.

And buy the way, I believe in "trickle down economics".

[joanmcq]

Do you believe in the tooth fairy too?

[JohnH]

The govt SHOULD borrow the money

I disagree. It definitely IS a return of our money - we are the source of any money the government actually has to begin with.

The government doesn't have any money of its own, the only money it has is the money it confiscates from the taxpayers in the first place ( I would argue that most of it is stolen from the taxpayers by using the power of the state to legalize what would be an immoral theft in any other circumstances).

Anyhow, the government doesn't have a savings account to draw upon and it doesn't get a second job to fund the rebate, so if it has to borrow the money then that's OK by me. Borrowing isn't the biggest problem - spending is the problem. Are they borrowing the money to fund the rebate, or are they borrowing the money to fund teapot museums, bridges to nowhere, and to pay people not to work? One's perspective on the source of these particular funds depends upon whose ox is being gored and what political jersey they wear.

Maybe the taxpayers will eventually look at all the borrowing and conclude the people charged with doing the spending need to be put on a financial diet. A bright spotlight needs to be constantly shined on their irresponsible behavior. Probably will never happen, but I can hope.

In the meantime, any small amount of restitution by the elected criminals is a good thing. Returning a little of the stolen goods to their rightful owners (those who earned it in the first place) is a step in the right direction.

[joanmcq]

Did people earn it by having kids, or being on social security? If this giveaway had any relation to the amount of taxes actually paid, then maybe you've got a point. But people with kids pay less in taxes than I do as a single person that decided not to run up the overpopulation (and since I don't get to deduct my cat's vet bills, or get a 'cat tax credit' if I adopt a kitten, I'm pumping more into the economy, at least at petsmart and the animal hospital). I agree with you about pork spending. But there are roles for the government; hey, I like being able to call the police, and having clean water to drink, and somewhat cleaner air to breathe (and if CA wins its court case, maybe it'll not force me to move out of the valley now that I have athsma due to bad air), and parks, and libraries (no room for more books in my house), and roads to drive on, and fire departments, etc. Without taxes, we have none of those things. If we had effective government, we would have more of those things, and less taxes maybe. But giving away a few bucks, that we will be paying interest on forever is not an effective way to lessen our tax burden. Its just more pork, albeit to more people than usual.

[Bees Knees]

Oh jeez, why get your knickers in a twister over this???

Its pure and simple buy your vote time. Somebody wanted to buy your votes and everyone jumped on board, so now everyone is in favor of bribing voters. It has nothing to do with simulating the economy.

Just be glad politicians like to make tax rules complicated and give everyone free stuff during an election year. Maybe we ought to have elections more often.

As to where the money comes from, it’s called US government bonds. A great investment…backed by the largest printing press in the world….

[JohnH]

Well, what about the rate?

I keep hearing how the US economy is in such bad shape and our government is just printing the money, etc, etc. Yet, the US Government is considered by those with the really big bucks to be the safest investment they can make - otherwise we would not be able to sell our debt instruments at ridiculously low interest rates.

To me, that speaks volumes about where the people and governments who control the wealth choose to put their money to keep it secure and to be sure it's there when they want it back.