The economic stimulus checks arriving in mailboxes across the country right now were supposed to goose a stagnant economy back into action. But given the 40 percent run up in the price of oil over the past three months, the much-ballyhooed plan may do little more than help Americans tread water.
The Wall Street Journal quotes UBS economist James O'Sullivan as estimating that the $100 billion or so in rebate checks add up to "an extra 1 percent of annual disposable income for consumers." But the oil price increase already registered this year equals a 1.5 percent tax on income.
"It's going to pretty much neutralize" the stimulus, said O'Sullivan.
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