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Discussion in 'Money Talk$' started by TomVols, Jan 26, 2008.
Which do you believe will help stimulate the economy?
I voted that both will help equally. The sad thing is that I think NEITHER will do any good!
Neither. However, I am not going to turn down the $1,200.
Won't it be nice to get back from the government some of our money that they forcibly took from us in the first place!! :thumbs:
Like Ken, I also voted neither, but actually I believe Bill had it right!
I think the rate cut might help slightly more. Banks might loan a bit more. I don't think HELOC rates coming down will help. HELOC rates were low anyway. I don't know if people will take out more mortgages (if they fall as well since these aren't tied to the Prime rate typically). A reduction in credit card rates would help nominally since consumers tend to use so much plastic. People who save are still going to save. People who spend are still going to spend.
The tax rebate isn't a bad thing. It depends on what else is part of the stimulus package. (I just hate the notion that the govt thinks it has the power to stimulate the economy. Its role in stimulating the economy should be to get the heck out of the way). Thus, I think the best thing for the economy is marginal tax reduction and an elimination of the AMT, not necessarily in that order.
I think the rate cuts will help more in the short term, but the tax rebates will help more in the long term. The more money in the private sector and away from the government, the better. However, some people may not use their rebate to buy stuff, but rather to save or payoff debts. But that savings or debt payoff will reap benefits later.