Will the Tax Rebate Stimulate the Economy As Planned?

Under severe criticism for his lack of focus on the US economy, George Bush has at long last decided to do something!  Is it an effort that is a “day late and a dollar short”?  Or will it deliver the desired results, and stimulate our stalled economy – and housing market?

When considering this question, I am reminded of the old adage, “Give a man a fish and he eats for a day, teach a man to fish and he eats forever”.  What will happen to the economy after John Q Public has spent this rebate – probably to catch up on aging bills or stock up on groceries for the family?  Will there be new jobs created through this approach?  Probably not.  Will there be more safety in assuming Social Security will cover the aging Baby Boomers needs?  Once again – probably not. 

According to the NPR website, many American’s will probably sock this money away in a savings account through fear that things will get worse before they get better.  If this happens, there will be NO net stimulation of the economy! 

My thoughts are that this will cost the Federal government $150B with no net effect – either positive or negative – on the economy.  

Comments anyone??