Bush says rebates should help economy

April 25, 2008 7:37:58 AM PDT
President Bush acknowledged that the economy is weakening, but expressed hope that tax rebates that start going out on Monday should help shore things up. "This money is going to help Americans offset the high prices we're seeing at the gas pump, at the grocery store, and will also give our economy a boost to help us pull out of this economic slowdown," he said Friday in brief remarks at the White House.

The rebates range from $300 to $1,200 and are the centerpiece of the government's $168 billion stimulus package, enacted in February, to brace the teetering economy. Roughly 130 million households are expected to get them. The Bush administration is hoping that people will spend the money, helping to bolster the economy.

The IRS says the first direct deposits of rebates will begin Monday, with paper checks to follow starting next month.

"Obviously our economy is in a slowdown," Bush said.

Earlier this week, the president denied the nation was in a recession, instead saying, "We are in a slowdown." But many economists believe the economy may already be in a recession.

A trio of crises -- housing, credit and financial -- has threatened to plunge the economy deep into recession.

The economy grew at an anemic 0.6 percent in the final three months of last year and is believed to have gotten even weaker in the first three months of this year. The government will report on the first quarter's performance next week. A growing number of analysts believe the economy is shrinking now.

With the economy faltering, the nation's unemployment rate has climbed to 5.1 percent, the highest since September 2005, when it suffered from the devastating blows of the Gulf Coast hurricanes. Job losses in the first three months of this year neared the quarter-million mark.

The collapse of the once high-flying housing market has been the biggest weight on the economy.

With many people watching their single-biggest asset -- their home -- falling in value, they have been less inclined to spend, weakening the economy.

Foreclosures have surged to record highs and financial companies have taken multibillion losses on mortgage investments that soured. The situation has sent a tremor through Wall Street and has sent the administration, Congress and presidential contenders looking for ways to provide relief.


Load Comments