New York Times Surprised Rebate Checks Not Consumed

I found Sunday’s front page New York Times story on the fate of rebate checks a bit odd. With the remarkbale increases of gas prices, mortgage delinquencies, and household debt, the paper of record sounded surprised that families were not exchanging their windfall directly for more consumer goods.

Perhaps I shouldn’t be shocked given how Washington sold this $158 billion package. As I said before, people would be forgiven if they felt it was their patriotic duty to spend their rebates. We knew at the time that many people were inclined to use these resoures to pay down their debts or even contribute to their savings. We know that other people in pretty good financial shape would hardly be inclined to change their behavior in any significant way.

That is not to say that there was never a macroeconomic justification for the policy but it was hard to hear it articulated by our elected leaders. Perhaps this should be an excuse for the Times. On second thought, perhaps they should have been required to read their own in-house economist (Paul Krugman) who has a spot on their op-ed page. This may have made for a more illuminating piece.