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BY CATHY JETT
Dennis Silver envisioned spending his stimulus check on a vacation in Florida.
Then reality set in for the Spotsylvania County tax preparer, who now has to pay about $70 to fill up his Toyota Avalon.
"I've got to spend that money wisely," said Silver, who has scratched his trip and plans to use the check to pay his rent. "I can't blow it."
Silver, who also inventories stock for area businesses in the off season, isn't alone. Of the 78 people who responded to an informal fredericks burg.com poll, 40 said they planned to use their stimulus checks to make mortgage payments, pay down credit card debt or cover other necessities, such as car insurance and rent.
Of the other respondents, 12 said they were socking the money away for future expenses such as a new roof, real estate taxes or retirement.
"I'm saving for a rainy day," wrote one, " and it looks like it's gonna pour."
Seven respondents said the money would go toward necessities such as outfitting their children for high school or vaccinating their pets, six said they'd splurge on such things as a laptop or HDTV, and five said they were using it to take a vacation.
"We're taking a trip to the beach to escape, if only for a week, the stresses and realities of everyday life," one wrote anonymously.
The remaining nine checked "other," saying they were going to use the money to do everything from buying tickets to James Monroe High School's football games to helping to pay for a wedding to replacing their old, broken-down heater and air conditioner with a more efficient system than they'd planned to buy.
Those figures are in line with findings by The Associated Press, which asked a group of more than two dozen consumers from diverse walks of life to track their rebate spending. Participants said they didn't rush out on a shopping spree, even though the Bush Administration intends that money as a shot in the arm to an ailing economy.
Instead, they were more like David Hensley, a material manager at Masco Builder Cabinet Group in Culpeper, who told The Free Lance-Star that he and his wife are using their stimulus check to help pay medical bills.
His truck spun and rolled during an ice storm back in February, which landed him in the University of Virginia Hospital in Charlottesville for a couple of weeks.
"Even with good health insurance, medical bills can mount up pretty quickly," said Hensley, whose portion of the bill totaled around $3,000.
Then his wife had to go back to the hospital to correct a problem that resulted from a previous surgery.
"Obviously, the stimulus check's not even enough to cover half of one of our medical bills," Hensley said. "It's so small."
By the time the last payments are sent out in mid-July, more than 130 million households will have received a total of $110 billion in stimulus checks. Most individual taxpayers are getting checks of up to $600, while couples receive $1,200 plus $300 for each eligible child under 17.
People earning too little to pay taxes but at least $3,000, including seniors whose only income is from Social Security, get $300 if single or $600 if a couple. The amount starts to phase out for those with incomes over $75,000, or $150,000 for joint filers.
The last time Washington undertook a similar stimulus program was in the summer and early fall of 2001, when it gave taxpayers rebates of $300 or $600. The eight-month recession was over by November, but it's not clear how much the money helped.
According to AP, the amount that people actually spent--excluding saving money, investing or paying down debt--was lower than many economists expected, although estimates vary so widely an exact total is hard to peg.
This year's program delivers a bigger shot of adren-aline to the economy in hopes of encouraging people to buy items they otherwise couldn't afford.
Sandie Frazier, who does data entry for Direct Response Data Management in Stafford County, for example, is shopping around for a Dell or HP laptop to replace her slow, aging computer. She'll use it to pay bills, check e-mails and surf the Net.
"I figured it was a dream," she said. "We live week to week and never have any extra money."
She and her husband, Eddie Frazier, who suffered a heart attack a year and a half ago, thought about taking a vacation, but he said he'd rather have something concrete to show for their $1,200 check, like a power washer.
"I figure I can get a decent laptop for about $800 and let him have the rest," Sandie Frazier said. "He can go to Sears to buy his guy toy."
Based on economists' preliminary assessments, and echoed by the AP's sample group, Americans are spending their stimulus checks. But more of the money is going toward essentials than the government had expected.
It's easy to see why.
Gas prices have shot up more than 30 percent since the rebate check amounts were first announced, and food prices are projected to increase 5 percent or more in 2008, according to the AP.
Joseph LaVorgna, chief U.S. economist at Deutsche Bank, thinks at least half the rebate money may go toward energy costs alone.
"It's not going to give you the bang for the buck as originally envisioned," he told the AP. "The odds of it having a longer-lasting impact on the economy are less. People were not planning to use so much of it on energy and food."
Cathy Jett: 540/374-5407
Email: cjett@freelancestar.com
The Associated Press contributed to this story.
