Wow. Our experiment is off to a great start—let's see if we can finish it off sooner than expected.
FUN WITH REBATES....Felix Salmon thinks the Obama economic team is showing its behavioral economics roots. Why? Because their proposed tax rebate will come a little bit at a time by reducing tax withholding in paychecks:
The point of a stimulus package, of course, is to boost spending. And hiding a tax rebate in slightly higher take-home paychecks seems like a good way of doing that: even people who save a certain amount of money every month still tend to spend the rest.
I guess that's true. Send me a $1,000 check, and there's a good chance I'll use it to pay down my credit card. Reduce my withholding by $20 a week for 50 weeks, though, and I'll probably just blow it on beer and fritos. And that's consumption, my friends!