This WSU Newsline Podcast is available at http://www.wichita.edu/newslinepodcast. See the transcript below:

You’re listening to the podcast edition of the Wichita State University audio newsline. Learn more about WSU — the home of Thinkers, Doers, Movers and Shockers — on the Web at wichita.edu.

Taxpayers may think it’s Christmas in May as they receive tax rebate checks from the IRS ranging from $600 to more than $1,000. The idea behind the tax rebate is to stimulate the economy by getting people to spend more money. It’s unclear, though, whether the tax rebate strategy will succeed, as Wichita State University economist Jim Clark explains.

Clark: “History says that these kinds of tax rebates may work, but it’s not completely sure that they’re going to have an impact on people. It all depends on what we as consumers do with the money that we’re going to get back from the government.”

So what is the purpose of the tax rebate checks, anyway?

Clark: “The idea behind the tax rebate is to help stimulate the economy by getting people to spend more money. We’re headed toward at least slower growth, if not an actual recession. The idea behind this is to make the economy start growing again.”

Clark looks at the biggest upside of the tax rebate for consumers.

Clark: “The biggest upside for us as consumers is that we’ll have some more money to spend. That always leaves us in much better shape than we otherwise would have been.”

Of course, not everything is coming up roses. There’s a downside to the tax rebate as well, as Clark explains.

Clark: “The downside to the tax rebate is that the government has to get the money to pay the rebates with from somewhere. Probably they’re just going to increase borrowing so that future generations will have a bigger national debt to pay off.”

And then there’s the matter of what taxpayers will do when they receive their tax rebate checks.

Clark: “What consumers are going to do is going to depend on the individual. Some people are just going to take the money and put it in a savings account. Some people probably will use it to pay down their credit cards. And some people may do what the president and Congress want them to, which is go out and buy something they otherwise wouldn’t have bought.”

And it shouldn’t come as any surprise that there’s at least some confusion and misinformation concerning the tax rebate.

Clark: “There’s a rumor floating around the Internet that all that the tax rebate is going to do is reduce the amount of a refund that you’re going to get next tax year. That’s not true. This is an actual reduction in the amount that you’re going to have to pay in taxes.”

Thanks for listening. Until next time, this is Joe Kleinsasser for Wichita State University.