hr: Money

In many ways, the success of an economy is like the chicken and egg situation. The economy slows down because consumers don’t have enough money to spend. This causes the companies and firms that make up the economy to lose revenue and consequently profits. Because of this, they cut down on salaries, and engage in layoffs. This lowers the disposable income of consumers even further.

Hoping to break this vicious cycle, the US government is trying to give consumers some extra disposable cash to spend more, and thus help flagging businesses. On Monday, Tuesday and Wednesday, the government will start distributing tax rebates to citizens 5 days earlier than usual.

The treasury is hoping to funnel $110 Billion into the pockets of 130 million taxpayers in a bid to increase the levels of spending so that the US economy gets a boost. This measure is enabled by a law that was signed by President Bush in February in an attempt to boost the slowing US economy.

Taxpayers will get the rebates in an order that is determined by the last two digits of their social security number. Those who opt for Direct deposit with the IRS will get the rebates before those who use snail mail.