Wednesday, April 30, 2008
Now that the first "stimulus tax rebates" are appearing in bank accounts, people need to start thinking what to do with them. Conveniently, the US Treasury will start almost simultaneously issuing one year Treasury bonds. The first ones will become due in a year in early May, when the additional taxes will be back in (remember, the rebate is just an advance). The Ricardian Equivalence is complete.