Couric: 'Incredible Shrinking Rebate' May Not Be Enough
After lobbying hard for the government to intervene in an economic slowdown, some in the media are now questioning whether the federal economic stimulus package is enough.
“CBS Evening News” anchor Katie Couric warned viewers on April 28 the rebate checks “may not do all that much” because of inflation concerns.
“The government started sending out those tax rebate checks today, but they may not do all that much to stimulate the economy because a lot of the money will be used to pay for basic necessities like energy,” Couric said. “The price of oil approached $120 a barrel today before closing at a record $118.75.”
Despite some receiving checks between $300 and $1,200 and an extra $300 per child, Couric deemed the rebate checks as “shrinking” because of high gas prices.
“Another all-time high for gasoline as well, a nationwide average of $3.60 a gallon – [CBS correspondent] Anthony Mason now on the incredible shrinking rebate,” Couric said.
According to Mason, for the rebate to work as planned, the money must be spent in order to give the economy the needed “stimulus.” Mason was concerned that people will do something responsible with it – like save it or use it to pay down debt.
“The government is hoping we all go out and spend that money,” Mason said. “[I]n fact, more than half of those expecting a check, according to a new CBS News survey, intend to pay down their bills. More than a quarter say they’ll save the money. Only 18 percent plan to spend it.”
However, University of Maryland economist Peter Morici explained those who use it to pay down bills will likely be in a position later on to “stimulate” the economy.
“Well, we all say that, but also if people have a credit card balance and they pay it down this month with the check, then they’ll be ready to spend even more next month,” Morici noted.
Mason mischaracterized remarks by George W. Bush on April 25. According to Mason, Bush said the checks’ buying power had been “eaten away.” But, that’s not exactly how the president said it, based on the clip “Evening News” ran.
“This money’s going to help Americans offset the high prices we’re seeing at the gas pump and the grocery store,” Bush said.
