Nick Florentino, a junior business major, said he’d spend it on books for school.
This spring, the federal government is planning on handing out checks to millions of Americans in hopes of kicking the economy back into gear. President George W. Bush signed the bill Feb. 13. To the ear untrained in economics, this sounds like a pretty good idea.
Economics professor J. Tucker Taylor doesn’t buy into the logic behind the rebates, however. He said he thinks it’s an effort by Republicans to avoid sounding soft on the recession everyone’s been talking about lately.
Political ploy or not, the money sounds great. College students all around need a little more money, regardless of what they might spend it on.
“College kids would be a better demographic than the affluent professional middle class, which is where most of it’s going to go, but not as good as giving it to poor people, nearly poor people and lower working-class people,” Taylor said.
The poorer the person, the higher their propensity to spend money, Tomczyk said. The wealthy are less likely to notice rebate checks and more likely to hoard the money.
But he also said that if people use the rebates to pay off debt, they’ll be ineffective because that’s the same as “saving” money, so to speak. This begs the question, won’t poorer people just use it to pay off debt and therefore render it ineffective?
Which is why college kids are the best candidates to receive the rebates. They don’t have to worry about debt for at least a few months, if not a few years.
And until all that college debt catches up to them, their favorite things to purchase seem to be iPods, laptops and textbooks, which everyone needs but nobody really wants to dish out the cash to buy.
Demand for a lot of these things would lead to the creation of more jobs, which Taylor said is the whole idea. More jobs would help stimulate the economy.
Another favorite purchase among college kids is food.
Tomczyk explained that every little bit helps by referencing his idea to spend some of the money on dinner out. All spending becomes someone else’s income, which in turn helps the economy.
So, students in college would once again be the best choice. Without too much immediate debt while in school, they are less of a risk to spend it on credit card bills or other payments that would mean about the same as saving.
There’s a psychological aspect to spending – if people feel good about getting money, then they’re more likely to spend it, Tomczyk said.
No demographic would be more excited about getting a $300 check in the mail than students here at Temple.
Come springtime, look for that check in the mail.
Morgan A. Zalot can be reached at email@example.com.