By on May 7, 2008

dollars.jpgOr any other U.S. industry for that matter. WardsAuto.com dropped in at the Consumer Bankers Assn.’s auto finance conference in mean old Frisco and reports that no one in the car world expects the election year sop to economically downtrodden voters to stimulate sales. Emily Kolinski Morris cites historical precedent to conclude that no one's gonna buy nothing with their refund money. “An estimated 25% of rebate checks were spent in 2001," Ford's senior economist declared. "And that is expected this time around, too." Which raises an interesting question, why'd they hold a conference, then? Meanwhile, Morris cited a more recent survey showing similar stats: 43 percent of today's Americans will use the refund bucks to pay off debts, 26 percent will save it and 24 percent will spend it. Apparently, "that leaves one banker at the conference torn. 'As an automotive lender, do I want people to take the money and pay off debt or take it and buy a car?' says Nicholas Stanutz, senior vice president of the Huntington National Bank. 'I have mixed feelings.'” Consumers saving money? Bankers with feelings? Strange times. 

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13 Comments on “Federal Tax Rebates Will Do Sweet FA for the Auto Industry...”


  • avatar
    GS650G

    Mine is already earmarked for property taxes; from one hand to another, from one gapping maw to a smaller one. The money earmarked for property taxes will go into heating the house, filling the tank and buying food.

    Spending it on TVs, vacations, cars, furniture, or other toys is just not an option. Politicians raise taxes when the budget comes up short, us poor people don’t have that option, we run debts or do without.

  • avatar
    Alex Rodriguez

    Mine is being spent on a vacation, so I guess I have to be classified as a “rich” person, and one of the evil 24% that is going to spend the tax rebate.

  • avatar
    jaje

    IIRC, if you make over $80k per year as an individual or $160k combined you do not get a rebate at all. A lot of people in this income range are pretty badly in debt too. Income levels like this are the lower middle class in large cities where property values are so high that they are very house poor (especially since home prices have dropped so badly leaving them stuck and under water).

  • avatar
    rpenna

    I’m not eligible for this rebate. So, no tax rebate, not able to contribute to a Roth IRA, no child tax credit.

    My investments are done throughout the year as part of my income management. I can think of at least 10 things I would use $1800 for, all of them serving to stumulate the economy, which was the intended purpose of this rebate. However, the millionaires in Congress believe people in my income bracket are more likely to “save or invest it”. I can’t imagine that percentage is anywhere near the number of people who will be getting a rebate and using it to pay of bills, money that’s already been spent.

    In the end we’re just injecting more cash into the economy, lowering interest rates again, causing more inflation and devaluing an already pitiful dollar. Maybe people SHOULD save the money they’re getting back. They’re going to need it to pay for the commodities that will continue to skyrocket as we keep pumping more cash into the system.

  • avatar
    Lumbergh21

    Meanwhile, Morris cited a more recent survey showing similar stats: 43 percent of today’s Americans will use the refund bucks to pay off debts, 26 percent will save it and 24 percent will spend it.

    And the remaining 7% will lose their check.

  • avatar
    brettc

    I’m spending mine on a vacation. But it’s going to be spent in Canada, so I think George’s plan may have backfired in my situation. But it sure will be nice to go away for a week with “free” money.

  • avatar
    Landcrusher

    No rebate, no unsecured debt. Outvoted at every election by people who think government should take care of them.

    The latest attack on my savings is the local bar association pushing for a fully funded Public Defendants organization so that poor criminals get decent representation.

    I can’t help but wonder how many of the poor criminals would be at work if it weren’t for the last attack by our supposedly Republican legislature which has been trying to run all the businesses out of the state with more taxes and bureaucracy every year. They went for a 10% “profits tax which no one understands, and which magically taxes companies without profits as well. The Tort bar and their cousins the insurance mob love it because it is making it too expensive to form LLC’s for anything other than a fortune 1000 firm.

  • avatar
    Geotpf

    I’ll probably buy stock with my check.

  • avatar
    improvement_needed

    geotpf:

    stock in an oil company….

    (that is also responsibly getting into alternative energy sources / production)…

  • avatar
    prndlol

    After reading the headline i have to ask- is the word ‘all’ considered swearing now?

  • avatar
    Kman

    “In theory, theory works, in practice, it doesn’t”.

    I can’t believe grown men and women, tasked with the responsiblity of managing the (supposedly) leading society on earth (USA), actually believe in their hearts and minds that this “injection” into the economy was going to jump start it.

    Worse still is when we already have data of the last “injection”, only 25% of which was spent.

    Run a business like a business.

    Run a society like a society.

  • avatar
    Kman

    I had published this back in 2000 after the first “cash-back”. An extract (replace “$500” with “$600” for today — doesn’t change much):

    The one, single, weakness of American society is the premise of unequivocal individual freedom (a tremendously precious value), without the balancing factor of social responsibility. You can want to “Live free or die” all you want, but it is an inescapable fact that we live amongst 300 million other Americans. As long as we ignore that fact, we will always be re-hashing the same issues.

    A tax cut that puts 500$ / yr in your pocket translates to ~42$ / month. You may think this is your money and you want it anyway. With this, you just ignored that, for better or for worse, you still live with 300 million other people. Your collective wealth just went down A LOT for 42$ / month. Now the leaky roof on the local school cannot be fixed. Classes had to be shut down for a few days during a heavy rainstorm; this was just enough to push one kid to drop out of middle school. This girl gets pregnant, and, since abortion is outlawed, gives birth to a baby boy at the age of 14, when she wasn’t ready. Abandoning her baby, the child grows up in foster families, orphanages, getting thrown around the now underfunded system. By the time he’s 13, he’s found salvation in street crime, perhaps even organized crime. At 16, he robs your house, but is caught and put in jail. Being underfunded, the jail system is overcrowded and releases him very early, all the while having no resources to rehabilitate him. This 19 year old, having gotten raped in jail, is back out in the world with no support systems and is now considered and adult — even less support.

    Remembering the layout to your house, and his mistake in not defeating the alarm properly, he decides to go back, because he’s hungry and needs some cash, dammit. Breaking into your house again, this time he makes the mistake of coming when your teenage kids are at home. Panicking, he attacks them and a fight ensues. He runs off, but your 15 year-old got his neck twisted and is now paralized from the head-down. But don’t worry, you have that extra 42$ to pay for the first 30 seconds of his treatment.

    The rest of his life? Well, you’re on your own.

    (c) Mark Khoury

  • avatar
    Landcrusher

    Kman,

    Collective responsibility cannot exist without individual responsibility.

    Individual responsibility cannot be learned without suffering consequences.

    Under the modern liberal ideals, collective responsibility seeks to eliminate the suffering of consequences. Ergo, the liberal ideal cannot be reached without sowing the seeds of its own destruction.

    The really neat trick with the recent bonus checks was that people were excluded from the checks, not based on wealth, but on income. In other words, the most responsible people, in general, were reminded that they can only depend on themselves. While those less responsible, in general, were reminded that Uncle Sugar will provide. (The in general part is key because there are many people all over the income spectrum which do not fit the correlation between taxable income and responsibility.)

    Once again, the liberals inact policies that will worsen one of their preceived social problems – disparity of incomes.

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