by Codak Simpson

Created on: April 25, 2008

The hardest thing to do is usually the right one. That is advice that I received as a little boy and I believe it applies to this issue perfectly. I do not believe the tax rebate will work as an economic stimulus plan if people choose to be smart about their finances and do the right thing with the money they receive. That "if" is the key. If they listen to the government and spend every penny as quickly as possible, sure they will have more "stuff," and the plan will have a hope of succeeding, but where will that leave them? The answer is that they will be no better off than they were before.

As a general rule to live by, I try to believe in the inherent goodness and intelligence of most people. Although there may be exceptions, I believe that this intelligence would encourage people, in this time of hardship, and I daresay recession, to invest wisely. This investment, for the future, when there is no certainty that the economy will stabilize any time soon, should not be spent frivolously.

In order to invest wisely, it is important to consider this a very personal issue. What may be appropriate for one would not necessarily apply for another. If you are struggling financially with credit card debt, making low monthly payments and have high interest rates, the wisest thing for you to do might be to pay them off so that in the long run you will save more money. In that situation, the next thing to do would be to analyze how and why you got to that point so that you may be able to save and prevent it from happening in the future. If you have little to no credit card or other revolving debt, then spending the tax rebate would still not be the best idea. It would be better to invest it in a savings account and let it pay you interest, as a nest egg that helps to set you up for a more secure financial future. I do not believe that I am the only one following this line of reasoning and that is where the difficulty lies in the effectiveness of this plan.

If the tax rebate is to work as an economic stimulus plan, it proposes and encourages people to go out and spend the money to introduce funds back into the economy. In theory, this is a great idea, but when you have to decide between your family and what is best to keep your home from foreclosing or food on the table and the economy, I am not nave enough to believe that people are going to choose the economy. Realistically then, I do not believe that even if a large portion of people choose to use their money right away,

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