With the 2008 stimulus checks floating around, did this relief help your wallet? The economic stimulus package didn’t reduce oil prices and didn’t solve the credit crunch, but it certainly tuned up the engine of the U.S. economy – consumer spending. According to CBS News, personal spending went up by 0.8% in May, the largest gain in six months.
Want to hear something more impressive? Disposable income shot up 5.7% in May – the biggest monthly increase in 33 years. Additionally, overall income increased 1.9%, and the personal savings rate for May hit 5%, the highest rate since May 1995.
Clearly, the stimulus was a great economic aid at a point when gas prices and food prices were threatening the quality of life for the average American. It gave the consumer a break; it lifted morale. Even if the effect was “psychological”, let’s not forget how much psychology drives consumer purchases and the stock market.
Do I hear a second stimulus? Some politicians want to see it happen, and it could happen, though it might not in 2008. As early as February, U.S. governors pressed President George W. Bush for a second stimulus package that would boost funding for state infrastructure repair and thereby create new jobs and build state economies.
The Bush administration has stated that it wants to see the full effects of this stimulus package play out before considering any further action. On June 6, President Bush called on Congress to follow through on other types of measures that might help the economy, such as permitting the expansion of oil exploration in the U.S. and making tax cuts passed during his presidency permanent. With the Bush administration ending in January, the time horizon for any stimulus proposal originating from the White House is quite short. While calls for another stimulus have occurred since winter, the economy will likely dictate whether another package is needed.
Did the stimulous package help you?
What did you do with the money?
I’d love to hear your story…