Rebate checks won't get spent

Tax rebates are the centerpiece of the government's plan to stimulate the economy, but many Americans are planning to put the money in the bank or use it to pay off debt, according to a survey released Monday.

A CNN/Opinion Research Corp. poll found that 41% of respondents plan to use their rebates to pay off bills, and 32% will put the money in savings. Just 21% of those polled intend to spend the money, while 3% said they will donate the extra money to charity.

"We've never done this in a period when American households are so deeply indebted," he said. "While [saving the rebate] is a valiant thing to do, what you want them to do is spend it."

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When the overall goal of a program is to introduce money into an economy, and the result is predicted to be that only 21% of the money is actually going to be spent outright, the efficiency of the program seems very low. A 21% effectiveness rate is extremely low, even for the government. Hindsight or midsight being clearer than forethought, the stimulus package could probably have been handled a little better.

Truckers Unable to Raise Prices, Losing money

From truckers and farmers to loggers, construction workers and fishermen, skyrocketing diesel prices are pushing what many consider the backbone of the American economy right up to the breaking point.

"I'm in debt," says Jim Gossett, an owner/operator truck driver with a wife and daughter in Chapel Hill, N.C. "Do I turn in all my equipment, potentially lose my home?"

He says his profit margin used to be around 25 percent. But with the near-tripling of diesel prices over the last few years, he now says that has been cut to 5 percent.

"You can't get any work if you raise your prices," said Tyson Clay, filling up the tank for his bulldozer at a gas station in Camden, Alabama. "You just grin and bear it, people are only going to pay so much to get their land cleared."

Unlike the average consumer who can cut back on gasoline use when prices get too high, businesses of all types have little recourse.

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Competition keeps prices low for consumers, but what about the people who are suppliers? For the transporters, at least, the cuthroat competion is a little too much. The market can only bear so much, co consumers will have to expect a price hikew soon, because if the truck drivers do not raise their rates, the scarcity from lack of transportation will drive the prices higher.

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Bear Stearns Dives After Fed Steps In With Bailout Funds

The Federal Reserve and JPMorgan agreed Friday to rescue Bear Stearns after its cash position "significantly deteriorated," sparking concerns of a global financial crisis and sending the brokerage's stock crashing 47% to a 91/2-year low.

JPMorgan will provide Bear Stearns with an undisclosed amount of secured funding for up to 28 days. But it's really just a conduit for the New York Fed, which will assume the credit risk.

Bear Stearns CEO Alan Schwartz said he contacted JPMorgan Thursday after investors, customers and lenders withdrew assets and canceled credit lines. He said the withdrawals could have outstripped the company's resources.

Stocks dived on fears that Bear might not be the only Wall Street giant to fall to the subprime crisis.

"It's the cockroach theory -- if there's one, there's got to be others," said Philip Orlando, chief equity strategist at Federated Investors.

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Although we are not technically in a recession, the leading indicators are certainly starting to show up. Most people believe that we are in a reccesion simply because the press says it, and it is difficult to tell whether it is a self-fufilling prophecy. It is certainly possible that the panic caused by major news stations caused the economy to slow, but the factors involved are far to numerous for it ever to be determined.

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Bush says economy will bounce back

The U.S. economy will emerge from its current problems "better and stronger than ever," President Bush said Friday in a major speech on the economy at the Economic Club of New York.

Speaking just hours after the Federal Reserve helped to engineer a rescue loan for investment bank Bear Stearns, Bush said that, although times are tough, the economy is resilient.

The country has endured tough times before, he said. "Every time, this economy has bounced back better and stronger than before," Bush said, expressing his optimism in the future of the country.

Leaders in Washington, including Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson are "on top of it and will take appropriate actions," he said. Bernanke is doing a good job, he said.

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Sometimes, with all this attention paid to the elections, people forget that we have a president named George Bush in office now. But we do and he still does ...something, including giving advice about subject he probably doesn't know much about in order to have a good public image, sort of. This time, though, he is right. The economy is almost certainly going through a normal cycle which, although some phases may be perpetuated by the media, will continue, and this recession will be followed be an expansion. The question is, how long will this take?

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Apple iPhone to offer corporate e-mail to challenge RIM

Apple Inc said on Thursday its iPhone soon will support corporate e-mail, targeting a new market and challenging the dominance of Research In Motion Ltd's popular Blackberry devices.

Apple also said it will roll out tools for developers to create software for the iPhone, news that was accompanied by a pledge from legendary venture capital firm Kleiner Perkins Caufield Byers to set up a $100 million "iFund" to back iPhone software start-ups.

"This takes the iPhone from being not really in the running in the enterprise to being very much in the running and gives RIM a serious challenge," Van Baker, an analyst with market research firm Gartner.

The move would help Apple hit its goal of selling 10 million iPhones by the end of this year, a target some analysts have questioned if the weakening U.S. economy takes a toll on consumer spending.

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This introduction of corporate email to the new fad in smart phones will greatly speed the iPhone's adoption in business circle where the employee demand is high, if the management's. The omission of corporate was probably the biggest factor holding back the iPhone’s sales. Now that this feature has been introduced, Apple will probably experience another surge of success.

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Some states consider own stimulus plans

While taxpayers wait for federal rebate checks that Congress hopes will help jump-start a slowing economy, state officials across the country are floating their own programs to stave off a recession.

Pennsylvania Gov. Ed Rendell proposed a one-time tax rebate up to $400 for more than 475,000 lower-income working families. Illinois Gov. Rod Blagojevich wants to give families tax breaks by selling off future revenue from the nationwide settlement with tobacco companies.

In Connecticut, some lawmakers want to send rebate checks of $50 to $290 to 1 million taxpayers. Legislators are also considering rental and heating assistance for needy families and a new revolving-loan fund to ease the subprime mortgage mess.

It's unknown how many - if any - of the proposals will become reality. Many were proposed by governors and legislators after Congress approved a federal stimulus package last month, which will send rebate checks ranging from $300 to $1,200 to millions of Americans and offer tax incentives to businesses.

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It seems odd that a federal policy designed to fix the economy of the entire nation should have to be supplemented with state stimuli covering only part of that country. As some of the people quoted in the article mentioned, Macroeconomic policy is much more effective, if it is indeed effective at all, if it is handled on a basis of an entire system instead of just one portion of the economy.

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