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Did The Tax Rebates Work?

I'd almost forgotten, but before President Obama's $787 billion stimulus package, President Bush signed a stimulus package called the Economic Stimulus Act. It contained roughly $95 billion in tax rebates that went out last spring. (This was a huge economic experiment: the package was more than twice as large as the $35 billion in rebates that went out in 2001.)

Ever since then economists have been trying to figure out how well it worked.

The Congressional Budget Office just posted this analysis.

And I'm afraid the answer is that we may never know.

As the graph above illustrates, our economy is so large that it's hard to detect whether $95 billion in rebates really spurred people to spend more.