With the prospects of a full blown recession looking more and more likely, everyone is hoping that something can be done to ward off the dreaded "R" word. Could tax rebates be the cure that we are looking to find?

One thing is for sure, no one is going to complain about getting a quick check from the government, but will rebates really be enough to keep the country out of a recession? The answer, sadly, is probably not. What they could achieve however, is to reduce the pain and the length of any recession that may occur this year.

Looking back to 2001 we get some evidence that tax rebates could at least provide some relief. When the country was headed into the 2001 recession, President Bush decided to add refund of $300 for individuals and $600 per household. The 2001 package, while not able to stave off a recession, is credited with part of the reason why the recession was so short lived.

During 2001, the country entered into recession territory in March that had already passed by November, despite the 9-11 terrorist attacks that took place at that time period. In order for any rebate package to have the same effect this time around, analysts are estimating that rebates would have to be lifted to $500 and $1,000.

But is it too late? I think it is fair to say that if you believe that a recession is on its way (which I do) that any rebate package will be too late to keep it at bay. Having said that, it could have a similar impact as it did back in 2001 and at least shorten any recession and help boost overall confidence in the economy.

The reason why tax rebates are thought to be effective is that they typically put money in the hands of the people that need it the most, lower income households. These families are the ones that will need help the most, and economist generally anticipate that the money these households receive will be put back into the economy pretty quickly. The 2001 rebates were estimated to have been sent back into the economy in the first six months after being issued; definitely a nice little boost to the economy.

Whatever the government decides, you can be sure that something is going to happen soon ... after all, elections are not that far away, and no politician wants to run a campaign during recessionary times.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer