Second stimulus check plan considered

July 21, 2008 at 12:52 PM
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WASHINGTON, July 21 (UPI) -- Many economists are expressing general skepticism regarding Washington political leaders' consideration of a second economic stimulus package in 2008.

Some argue it's a good idea if done differently from the first time but others are doubtful that money will circulate through the economy quickly enough or that recipients will spend the checks rather than deposit them in savings, The Christian Science Monitor reported Monday.

"The downside risks are significant. Another well-timed and targeted stimulus package would be helpful," Mark Zandi, chief economist at Moody's Economy. com, told the Monitor.

But University of Michigan economist Joel Slemrod has been studying what taxpayers have done with their first rebate checks.

"So far, we're finding that 20 percent of the people say the rebate led them to spend more," says Slemrod, noting that in May, the personal savings rate also soared to 5 percent, up from 0.4 percent the month before.

He told the Monitor he has a "wait-and-see" attitude about a second stimulus package. "I'm not sure we would want to do a second dose the same (way) as the first dose," he says.

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