Can tax rebates really prevent an economic downturn?

Few issues have brought Republicans and Democrats together like the economic stimulus package that was pushed through the U.S. Congress with breakneck speed in early 2008. When the Chairman of the Federal Reserve Board, Benjamin Bernanke, suggested action, Bush proposed and Congress passed a bill in an effort to jolt the economy out of a period of slow growth and housing recession. One of its main purposes was to provide tax rebates to lower- and middle-income people.

But how can a small windfall in your pocket jump-start the economy and prevent a country from falling into a recession? Taxes Image Gallery If you've read How Recessions Work, you know that recessions often aren' ... more.

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