Supply Side Economics

It looks like those of us with kids will soon be getting a tax credit. All that is left is reconciling the amount of the cut (not trivial) and resolving how much low income families will receive as a tax credit. With the potential that there will be a $400 retroactive credit for tax year 2002 coming our way very soon, as well as a few extra dollars in our paychecks (lower taxes lead to lower withholding) the question becomes, "Do we spend the extra money?"

Frankly, the answer is yes. Not that smart in an economy like this.

Or is it? An avowed non-economist begs to differ…

The intent of the tax cut is to stimulate our economy; if everybody were to sock it away in a mattress, then nobody benefits. Currency in motion is an economy in action. Currency at rest is an economy in stagnation. Right now everybody is freezing in place because nobody else is moving. It's a vicious circle, really.

Buy some CDs, get a good book, maybe some software or clothes. Perhaps the Salvation Army can put it to use or maybe you can go out for dinner a few times a week, buy some stock. Treat your pastor and his wife to dinner, buy some MacDonald's for a homeless person.

If my government wants us to spend the money, then perhaps we should see it as our civic duty, as it were, to put that money to use.

Just don't sit on it.