Under legislation enacted by the Bush administration and a bi-partisan Congress, 130 million American households will soon be receiving rebate checks to stimulate the economy.
Ranging in value from $300 to $600 a person, the checks are meant to put money back into the average Americans' pockets to spend. Checks are expected to be mailed starting in May, 2008.
But guess what? These checks going into the left-pocket won't even cover the money that higher priced oil is taking out of the right-pocket this year alone at the pump!
Gas prices last year averaged 65 cents more per gallon than the year before. And this year with $100 a barrel crude oil prices climbing even higher, this year's damage will be even more painful.
Sadly, the checks won't even cover the cost of higher priced gasoline during the year.
Filling up with 18 gallons of gasoline each week at 70 cents a gallon more per gallon for 52 weeks will set back each driver $655. (18 * .70 * 52)As the higher costs of energy also spreads to many other items in the economy, including food and consumer goods, the checks will be painfully short to cover all of the increases.
But Good ol' Uncle Sam will borrow the $150 billion, most likely from foreign banks, to pay Americans so they can buy higher priced foreign oil!
Source: Internal Revenue Service
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