How I Spent My Summer Tax Rebate Check

Actually, I haven’t yet.

Oh, the check arrived right on time — Monday evening, incredibly, the very day the IRS said it’d be mailed out to the lucky 10 million or so of us whose Social Security numbers end in 0-something. And it was $300, just like they said. I even brought that sweet yellow envelope and its contents into work to show everybody how newsworthy I was.

But there it is now, still sitting on my desk, untouched. Sorry, Mr. President — believe me, I know how much you could use the economic stimulus. Wall Street is counting on it to hold up consumer spending until the business cycle has a chance to come around again. So is Alan Greenspan, who’s running out of interest rates to cut. So are a lot of GOP congressmen who would actually like to get re-elected next fall.

But you have to understand. All that responsibility is a lot of pressure. I’m on the front lines of this $40 billion mailing — what I do with my $300 could influence stock prices this summer or alter Fed policy for its August 27 meeting. (And I know the bond markets are watching me like a hawk.) So I’ve been thinking very carefully.

The Bush Administration got one part of this plan right — this check is really too small to save. With the Fed cutting rates, this is a borrower’s market, not a lender’s, and besides it seems a little unpatriotic to do something contrarian like put it in a 30-year Treasury Note (thus discouraging national-debt repayment) so my unborn heir can buy some $450 textbook at college in 25 years.

Credit-card debt. Paying down high-interest debt, of course, is personal finance’s Rule One — it’s like getting 18 percent return on an investment in the middle of a bear market. And everybody knows credit-card balances never stay down for long, so really I’d just be delaying the stimulus until next time my paycheck doesn’t cover my expenses. But without getting into the dirty financial details, putting up $300 against my current credit-card- and other debt balances only depresses me with the sheer spit-in-the-ocean futility of it. With this volume, it's ridiculous to even try.

So I guess I’m spending it. But on what? This, my fellow Americans, is the business world’s version of an election. As corporate America contemplates emerging from its dark cave of pain this fall and winter, these tax checks will help determine which sectors get ahead and which pass into post-bubble history.

Should I buy, say, an energy-efficient air-conditioner to suppress demand for Big Oil and save the environment? A Palm Pilot, to help restore hope to the tech sector? If I tell my cable company I want all the channels for six months, perhaps I can speed the maturation of broadband and help my employer meet its 3Q estimates (and maybe give those stock options a boost too).

Maybe something simple like a toaster oven, or a really classy electric toothbrush, as long as it’s made in America by expensive union labor. The service sector is America’s future — maybe the place to put this is an extravagant dinner for two, or a cheap Yankees season-ticket package. Or maybe support financial services, manufacturing and tech all at once, and blow it all on 50 shares of Lucent. (At least I won’t have to worry about capital-gains taxes for a few years, if ever.)

But I’m an American consumer, and that means two things: I’m eternally optimistic, and I believe that buying the right stuff will indeed make me a better person. So here’s my shopping list:

1) New running shoes — so I’ll finally start going to that gym that I charge on my credit card every month.
2) A new shirt or two for the office — so my bosses will think I’m working harder.
3) A week’s worth of fast-food lunches.

What? It’s all spent already? Oh, well — hope that helps, Mr. President. Tell Wall Street I’ll buy that cool new cell phone/PDA next year, or the year after. When it gets a little smaller and a lot cheaper.

They take plastic, right?