Glenn Beck (who I have never heard of until this past week) has an idea to truly help stimulate the economy: Give Americans debit cards instead of rebate checks. You can read the whole ARTICLE which was posted on CNN’s web site earlier this week.
Basically he is saying that the money would be put back into the economy instead of stashed away in savings accounts or such. His reasoning comes from what happened with Hurricane Katrina.
After Hurricane Katrina, FEMA needed to get money to victims fast, so they tried something new. Instead of issuing checks, they issued $2,000 emergency debit cards for evacuees to use for food, water, and supplies.
As you probably remember, 2005 wasn’t exactly a banner year for FEMA. Along with food and water, some hurricane evacuees also bought Louis Vuitton purses, diamonds, and even breast implants. That caused major embarrassment for the government (at a time when they weren’t exactly in the market for any more of it) and the debit card program was scrapped.
I had no clue that was happening. It just goes to show that some people just don’t get it.
Obviously this isn’t an honest idea, but just a poke at the fact that government never seems to think things through enough. It seems to me, and I am not an expert by any means, that all in the House of Reps and some of the Senators are worried about re-election this November and think they can stave off a recession, therefore securing their seats.
February 16th, 2008 at 2:21 pm
the Republicans are going to lose a bunch of seats in the House regardless. I don’t think the checks are so much about saving their seats as to try to burnish the legacy of GWB. As one of the letter writers responding to the Beck piece, though, there’s something loco when you have an economy that is 70% driven by individual consumers, many of whom are in debt, and, somehow, it would be better off if we were MORE in debt.
And, while Beck might have been being cheeky, you DO have to spend a debit card. You can’t really save it (though I suppose you could get the cash and save that) . The problem with the checks is that there are a lot of working poor with no checking accounts. (Of course, the problem with the debit cards is security - cards lost, stolen, etc.)
February 21st, 2008 at 4:39 pm
Even debit cards can be manipulated in creative ways. I had a customer who charged new purchases to a debit card, connected to a joints checking account with her husband. She then returned the items to the store but used her personal credit card (her name only) , for the credit. (Not the debit card, some store don’t care where they run the credit back to.) Bottom line she played that game , paid down her personal credit card debts, wiped out the joint checking balance and then divorced her husband. Unfortunately, his pay check was automatically deposited into the checking and she did the bookkeeping for household. Talk about pay as you go!