A $600 infusion to taxpayers' pockets begins this week, but with mounting bills and rising costs, fancy furniture and new TVs are taking the back seat to mortgage checks and cable bills for many consumers.
"I'm gonna pay bills," Gina Smith, 43, of Chester said Monday, the first day federal economic stimulus payments were made to taxpayers with direct deposit. "Gotta get a jump on paying off the credit cards."
While the federal plan to advance taxpayers up to $600 each was designed to jumpstart spending in a sluggish economy, multiple surveys suggest consumers will spend more on debt or savings than new goods.
But that might not be a bad thing, said Winthrop University economics professor Bob Stonebraker.
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"In the long run, I almost hope people don't spend," Stonebraker said Monday. "The reason we're in this mess is because Americans don't save."
Stonebraker said that for years, Americans have piled on debt and relied too much on home equity for savings. He said a quick, short-term fix for the economy is possible if consumers spend the rebates. However, a long-term solution is more likely if Americans pay off debt and invest the extra money.
"What we need in the short term and what is best in the long term are quite different," he said.
But despite tough times, Stonebraker acknowledged some Americans' still cling to a seemingly undying desire to spend extra money.
"In this difficult time, more people will use their rebate to pay down debt than normally would, but I think more consumers will spend the money than are admitting it," he said.
Kurt Marine, manager of Berry's at Manchester furniture store is crossing his fingers that the professor is right.
"With gas prices and everything, I'm not sure how much (extra business) we'll get," Marine said. "I can tell you the hopes are that we will see a boost."
How are you spending it?
"I'm gonna put the money in a savings account so when I don't get a refund next year, I won't be broke."
-- Jay Shively, 46, York
"It can help me fix my car. And I'm gonna need an extra $300 to go with it."
-- Amini Cancel, 21, Rock Hill
"Just got a new car, so I'm putting it in the bank."
-- Sue Potts, 64, Fort Mill
"I have a new goddaughter. I'm getting a savings bond for her."
-- Dee Walker, 59, Rock Hill
The facts on getting it
The federal government on Monday began paying tax rebates to stimulate the economy. Here's how it works:
• To receive a payment, you must have a valid Social Security number, have $3,000 of income and have filed a 2007 federal income tax return.
• Those eligible will receive up to $600 each ($1,200 for married couples) and up to $300 for each dependent child younger than 18.
• To receive a full rebate, you must make less than $75,000 individually or $150,000 per household annually.
• Payments will be made first to those who received a 2007 income tax refund via direct deposit. Deposits began Monday and will be made each Friday until May 16, depending on your Social Security number.
• For taxpayers without direct deposit, paper checks will be mailed May 16 through July 11, depending on the final two digits of your Social Security number.
• Watch for scams asking for your bank account information. The IRS already has the information needed to make the payments from your tax return. Phone calls and e-mails asking for personal information should be ignored.
• For more details on how much you can expect to receive, when the payment will be made and scams to beware of, visit www.IRS.gov or call 1-800-829-1040.
"It's gonna be for a vacation. I need one. Or, to get my car repaired, if I'm being totally honest."
-- Scott Ivey, 20, Rock Hill