The New Economic Stimulus Package: $100 Billion In Tax Rebates A Month

By Douglas A. McIntyre Updated Apr 28, 7:19AM EDT · Published Aug 8, 4:43AM EDT

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Cammonopoly_wideweb__430x3250 Based on GDP figures and June numbers out of retailers including Wal-Mart (WMT), the tax rebate program helped the economy for about 30 days. July retail numbers seem to show that the effect did not go much beyond that. Economist Martin Feldstein recently wrote "Recent government statistics show that only between 10% and 20% of the rebate dollars were spent. The rebates added nearly $80 billion to the permanent national debt but less than $20 billion to consumer spending."

Feldstein may be off. When it comes to really large numbers, economists usually are. But, he is not off by a factor of two or three.

Tax rebates sent out by the US government totaled something above $100 billion.It helped the economy for a remarkably short time. That may be a warning sign of how deep a recession the economy is already in, a recession which probably worsened around mid-year. The present situation could do more damage to already badly damaged industries, particularly retail, airlines, and autos. The stocks prices for companies in these sectors reflects the inevitability of things getting worse.

The federal government could solve many of these problems by making the rebate program monthly instead of having it be a one-time things. It might bankrupt the government, but it would save a lot of companies and jobs.

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.