Tax Payers Spent, Not Saved, Their '01 Rebates

This part of an otherwise nice piece on economic stimulus packages in the U.S. and U.K. by Tim Harford caught my eye:

Empirical economists are still arguing over whether Ricardian equivalence roughly holds, but one study by Matthew Shapiro and Joel Slemrod concluded that most U.S. citizens used a the 2001 tax windfall to pay off their debts, leaving more money available to pay future taxes--Ricardian equivalence in action.

(emphasis added)

I've seen something along these lines stated a number of times in commentary about the current tax rebate, but it's worth mentioning that the study Harford cites is based on survey evidence and not actual data.

That's is not to say the same thing is sure to happen this time -- with American's attitudes towards the economy at 28-year lows, consumers would probably like to save a larger chunk of their rebate check. But with the prices of gas and food significantly higher than back in 2001, they may not be able to.