Spend, Spend, Spend That Rebate? John Q. Public Just Isn't Buying It
Wednesday, January 30, 2008
And so it has come to this: The burden of saving the world economy is placed on the backs of the average Joe and Mary. Suddenly, ordinary Americans who don't balance their checkbooks and who glaze over financial reports are sent out to spend our country back into happiness and stave off a looming recession.
The average Joe and Mary don't know about global finance, or why Asian markets plunged or why economic fear has spread around the world. But without so much as a lesson in the Dow, they, we, the ordinary people, are being charged with lifting the giant but limp U.S. economy with a proposed tax rebate of about $600 per worker. Go forth and spend, we are told. Save the world as we know it.
But there, the ideal meets the real, for we have raced to a shopping plaza and found Aileen Blakely, a federal worker from Shirlington. "If it happens, and they give us the money," she says of the windfall that's supposed to be spent to save the economy, "I wouldn't go out and spend it."
Well, that's not quite what the president's economists have in mind. But that, it turns out, is precisely what Blakely and others say they'll do -- or not do.
"I would pay down what's left on the credit card from Christmas and see what is left on the college bill," Blakely says. "With all the brainpower in D.C., they can't come up with a better stimulus idea?"
Then she pauses. Suspicion. "It's an election year. They are giving us money."
Yes they are. 'Cause times, they say, are that bad.
But the parking lot near the Pentagon City mall is crawling with shoppers and cars on a cold day. Here, there is no sign the economy is on the brink. No sign of an impending Great Depression with gray-faced people standing in soup lines. Instead, people in polished cars race for empty parking stalls. They honk at those who cut them off. People seem hellbent on getting a parking space, which allows them into the heaven of a giant store with its bright lights and pleasant smells and red lipsticks.
And here comes Nicole Gustafson, 30, another government worker, who lives in Crystal City. If she were to receive the rebate, "I would save it. It will not stimulate the economy," Gustafson says. "It's the dumbest idea I have heard. They need to feed the money to businesses. Not to individuals, because individuals will just save. People, generally when times are tough, they will save their money."
The admonition to spend is incongruent with conventional wisdom, the instructions of people who are supposed to be wiser -- government finance gurus or Suze Orman shaking her finger on late-night cable -- who have in the past rebuked us for not saving more. Rebuked us for being materialistic lovers of money.
For years, our elders told us that money was the root of all things bad. Making us feel guilty for envying money while we filled our pockets with cheap cliches: You can't buy happiness; patience is more valuable than diamonds.
Then this happens: Our government proposes something dramatic that cuts at the very heart of our thick, penny-pinching souls. The House yesterday approved rebates of $600 per worker and $1,200 per couple, plus $300 per child. A Senate rebate proposal is to be discussed today. The proposals are part of a "stimulus package" based on the premise that we will spend to avoid the hell of a recession.