Right now, political leaders are falling all over themselves to try and fix the economy. And one of the latest efforts in staving off a recession is the possibility of a $500 tax rebate to individuals. The Wall Street Journal reports on the proposed $500 tax rebate:

Faced with recession fears, the White House is considering tax rebates for individuals to encourage spending and tax breaks for businesses to encourage investment, according to people familiar with the matter.

The interesting point, of course, is that the idea is to stimulate the economy by encouraging spending. No encouragement to pay down debt, or put an extra payment toward a home mortgage. Indeed, a $500 tax rebate would do very little in terms of staving off the subprime lending crisis. The whole point is to get American consumers to spend more money.

While the $500 tax rebate would be given to individuals, businesses would also get tax breaks. Businesses would be encouraged to invest, but not individuals. Individuals would be encouraged to spend. Because saving it or paying down debt would not accomplish the goal of putting more cash into the economy.

Of course, the $500 tax rebate hasn’t even been presented to Congress as yet. It may never happen. But discussion of it does provide an interesting insight into how the economy is perceived to work by those “in charge.” The true interest isn’t ending the subprime lending crisis for the sake of the American people. It’s about “saving” the economy rather than redefining what makes it strong.

Tags: $500 tax rebate, mortgage blog, home mortgage loan, subprime mortgage,
subprime lending crisis

Tags: home mortgage loan, investment opportunities, mortgage lenders, mortgage loan blog, stock market, subprime writedowns