Some people waiting for their economic stimulus checks may be in for a shock. According to USA Today, about $2 billion in payments from 1.8 million checks are being confiscated from people who owe child support, student loans and back taxes. Taxpayers get letters from the government explaining why their bank accounts are not being stimulated and so far few have complained, according to a Treasury Department official quoted by the newspaper.
I am all for making sure that children get the financial support they deserve. People also should not be able to dodge student loan payments or tax bills. The government, though, cannot impose a one-size-fits-all solution. For instance, what if someone is laid off and is already behind in their bills? The economic stimulus is supposed to help people in need, right?
Though the economic stimulus checks have helped boost retail sales, investors should keep their expectations in check. Many of the people I know are using their stimulus checks to pay bills, not buy big-screen televisions. A good portion of my stimulus is going right back to Uncle Sam for taxes I need to pay for being self-employed. That's another rant for another time.
Interestingly, makers of luxury goods are responding to economic pressures.
BusinessWeek recently reported that designers such as Stella McCartney and Roberto Cavalli are producing goods for the mass market and Target Corp. (NYSE: TGT) has a stable of designers including Isaac Mizrahi, Cynthia Rowley and Liz Lange. Indeed, Coach Inc. (NYSE: COH) is even offering handbags for as low as $148 and key chains starting at $28 compared with the $1,200 higher-end hand bags. Maybe a fashion-conscious reader can explain to me how a $1,200 bag holds your stuff better than a $148 one.
Perhaps, the name "economic stimulus" is misleading. These payments are giving the economy a tickle when it needs a shock.
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Reader Comments (Page 1 of 1)
6-25-2008 @ 11:29AM
Mariux said...
The bulk of stimulus checks was alredy deposited to the taxpayers who used direct deposit. The rest of the checks are being mailed sporadically in about 10 different mailing dates or more, so they won't have such a big impact on the economy.
6-26-2008 @ 6:05PM
may40 said...
The stimulus check is a joke. If it is not being sent to all tax payers, then how can it be a stimulus? Some people are paying their student loans and back taxes and they still do not get a check. So, again how is it a stimulus. Just more government smoke and mirrors.
6-29-2008 @ 11:39AM
buck64aday said...
we will see how well the economic stimulus package helps us later in the year. while we are getting a boost in spending confidence now, what will happen later in the year when the stimulus money is all gone.
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