DelcoTimes.com

So how are you going to spend ’stimulus’ check?
Government is hoping to boost economy, but most plan to use money to pay off existing debt.
By Vicky Thomas newsroom@delcotimes.com

When asked where they would spend a $600 rebate check from the $168 billion economic stimulus package approved by Congress on Thursday, Freddy Begg and Collingdale resident Ervin Asburg didn’t hesitate to think of where their money would go.

“Bills!” the two answered at once as they entered the Wawa in Morton.

“Yeah, I’d put it toward bills. What else?” added Begg, a Springfield resident.

Beginning in May, the stimulus package would distribute rebates of $600 for individuals and $1,200 for couples, plus an extra $300 per child, in an effort to boost the struggling economy by giving taxpayers some extra spending money.
Individuals making up to $75,000 a year and couples earning up to $150,000 would get the full rebate. Those making more than $150,000 a year or too little to owe taxes will get smaller checks.

People who paid no income taxes but earned at least $3,000, including income earned through Social Security or veterans’ disability benefits, would get a $300 rebate.

The scramble to take action came as fears mounted that a severe housing slump and a painful credit crisis could cause people to clamp down on their spending and businesses to put a lid on hiring, throwing the country into its first recession since 2001.

Stephen Herzenberg, an economist with the Keystone Research Center, said if the package was graded on how well the amount of money would stimulate the economy, it would only get a “D.”

“Clearly the economy is in need of a stimulus. This is better than nothing, but it’s not much,” said Herzenberg, who noted that the bill doesn’t increase money to improve employee benefits. “It won’t increase investment and it’s not concentrated enough on the folks that are needing it at the moment.”

Herzenberger said the most efficient way to pump up the economy is for government to spend money on infrastructure.

“Here we are at a time when we’ve got all kinds of need to fix our roads and bridges and our schools. We’ve got all kinds of public investments that we’ve been skimping on,” Herzenberger said. “It’s very disappointing and the question is, are they going to be talking about what we need to do in three months, six months, and so on because they didn’t do it now.”

The legislation was approved by Congress on Thursday, but still needs a signature from President Bush.

Ken Finley, a Springfield resident, said he would most likely spend his extra cash at the shore.

“I’d probably put it toward a summer vacation,” said Finley. “It would be extra money to take the kids and spend it on the boardwalk.”

Ridley Park resident Jess Rosado said her rebate check would go directly toward bills.

“I’d put it toward my credit card payments,” said Rosado, who works in retail and as a mother’s helper. “It’s exactly what they don’t want me to do, but I need to pay my bills.”

Rebate checks could begin arriving in May. They would be based on 2007 tax returns, which are due April 15.

The Associated Press contributed to this story.

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