Tuesday, January 20, 2009

Taiwan's Vouchers

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.)

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.


Karl said...

Yep. I got to admire the printing on my vouchers for a full five minutes, at which point I wondered aloud if they could be used to buy beer. They were immediately confiscated, and I will never see them again.

mr.bean said...

Being that the majority of Americans are up to their eyeballs in debt (credit cards mostly) they needed their rebates to trim that down. Taiwanese (and most all Asians) are fanatical savers, some say 30 % of their income is saved. One hope for the vouchers here is that those smaller vendors who receive them, will in turn need to go and spend them again (& then another small vendor yet again) until they they end up in a retailer's cash register who will later be reimbursed by the gov't. (At least I think that's how they hope it pans out)

Anonymous said...

Mr. Bean, the fact that the Taiwanese are fanatical savers means they might just save these as well, no?

I think these may work better because of the CNY timing, though.

Karl said...

I think they have to be used by September.