There was a short discussion on Spend Matters a couple of weeks ago in which the effectiveness of the economic stimulus package was debated. I had posed the question about whether the last stimulus package worked but the community did not respond.<\/p>\n
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Fortunately, an article in today\u2019s Pittsburgh Post-Gazette provided an answer, saying:<\/p>\n
\u201cSome academic research dating back to the previous round of tax rebates in 2001 suggests households will spend at least a portion of this rebate on consumer durable goods, which can have a stimulative effect on the economy.<\/p>\n
\u201c\u2018We expect to see most of that stimulus in the second half of the year,\u2019 said Robert Dye, a senior economist with PNC Financial Services Group, Downtown. \u2018History shows there will be a boost to consumer spending because of this. Some will go to debt repayment and savings, but a good portion will go to consumer spending.’\u201d<\/p>\n
Of course, history is not a reliable indicator of future performance. But, in my opinion, if it worked before, it\u2019s worth trying again.<\/p>\n