PunkAssBlog.com

I guess when a country ponders approving a 3 trillion dollar budget when it’s already 9 trillion in the red, the idea of anyone ever actually paying off their bills must seem like a sucker bet. At least, that’s what certain “optimists” are *hoping* is the case when our little tax rebates start showing up in the mail:

The tax relief is intended to jump-start the economy. Politicians, worried about a recession in an election year, put aside their normal bickering to speed the proposal through Congress.

Nonetheless, there is debate over how effective it will be. Critics say debt-burdened consumers will use the money to pay bills rather than spending the checks and spurring growth.

An Associated Press-Ipsos poll found that only 19 percent of those surveyed said they planned to spend their rebate checks. Forty-five percent said they would pay off bills, while 32 percent said they planned to invest the money.

Supporters of the proposal said they have faith that people will spend the money when they get it.

“When you ask people what they will do with the money, they often say they will pay off their credit card bills,” said David Wyss, chief economist at Standard & Poor’s in New York. “People may mean it when they say it, but when you look at what they actually do, most of the money gets spent.”

Emphasis mine. Poor word choice is the AP’s.

The logic goes like this: people get their tax rebates, and instead of paying off new bills, they simply acquire more stuff. That infusion of cash into the economy supposedly turns our recession into more of a mild downturn. Disaster averted… today. But personal American debt is as out of control as the government’s and the legislators and economists supporting the rebate are literally banking on it staying that way. These bills will come due someday, though, just like they did in the subprime mortgage fiasco.

Economists and legislators pray that Americans continue to mismanage their long-term financial health so that we might nibble upon the tiniest morsel of temporary economic relief. And this is the norm. American economic policy of the last 30+ years has been designed to continually keep us afloat for the present moment, but by pushing back so many of the normal valleys that are supposed to accompany our peaks, we’ve simply collected all of them into a giant clump of gunk under the bed. One of these days, that clump’s going to become sentient, open its eyes, and in its repressed rage lay waste to everything around it.

But hey, hopefully that won’t happen in an election year, right?