Uncle Sam’s Club Card

TPC’s Len Burman has come up with an interesting stimulus idea:

“Send everyone with a Social Security number a prepaid card, like the ones offered by major credit-card companies. The money could be spent at any retailer that accepted the company’s credit cards. In principle, the card would be the same as cash, and might still allow consumers to save more. In practice, we know from behavioral economics that labeling matters. If people get a card that they can only use if they spend the money, their spending is likely to increase more than if they can bank a rebate check.” Here is his entire post at Economix.

A slightly improved version: Why not put an expiration date on the plastic or, like those ubiquitous Mall gift cards, reduce their value for each month the money is not spent? That will surely accelerate consumer spending.