Anonymous asked in Social ScienceEconomics · 1 decade ago

In 2003, the Internal Revenue Service began to mail out refund checks because of a change in the tax law...?

Economic forecasters predicted that consumption and GDP would increase because of higher refunds on income taxes.

Do you think there is a better way to make that fiscal policy more successful, rather than just refund checks???

1 Answer

  • 1 decade ago
    Favorite Answer

    No, the refund checks were very effective. We saw a very fast response in the economy. Almost any other solution results in a slower distribution or less efficient distribution of money, and will have less of an effect on the economy.

    If the stimulous package past this year was the form of checks to the people, the economy would be booming. Instead it is going to be distributed by the government, and they even admit that they will not be able to distribute more than about 25% of the package by the end of the year, and only 50% more next year. This is too slow to make any difference.

    I'm not going into my thoughts on if any stimulus is a good idea as that was not part of the question.

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