Supposedly only about 17% of the rebate checks sent out in the USA last yeat were actually spent. Most probably went to one-off payments on debt instead. (This is why economists say temporary tax cuts don't do as much to stimulate demand as permanent ones do.)
Tuesday, January 20, 2009
Now, Taiwan is trying to get around this by using a voucher system, where you have to spend the rebate. I will be interested to see if this system does better. Since money is fungible, people may simply use their vouchers on things they would have bought anyways and then save their "real" money.
This of course will be a very academic sort of interest on my part since the wife grabbed my vouchers out of the issuing clerk's hands before I even could glance at them.