Tax Rebates Can’t Rescue The Economy

By Douglas A. McIntyre Published May 14, 4:48AM EDT

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For someone who buys 600 gallons of gas at a price per gallon which is $1 higher than it was last year, a $600 federal tax rebate is not much comfort. Merrill Lynch sees that .

According to Reuters "I still maintain the business cycle is bigger than the government," Merrill’s North American economist David Rosenberg said.

For the rebate to be meaningful, the checks from the government would have to be closer to $2,000 to $3,000. Gas is not the only enemy to disposable income. The price of many food products is rising as commodities like corn and rice double. Research released yesterday shows that home prices in almost every one of the states are still falling. Getting refinancing and selling homes at a profit have become difficult, if not impossible.

The Administration and Congress underestimated the need for cash in most US homes because they did not see inflation coming. Now it is here, and a few hundred dollars will not change that.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.