The work on freezing some interest rates on subprime loans appears to be helping. While retail sales have been weak, it has not been a complete disaster yet. So consumer spending is still providing some support. However, it looks like a new issue with tax refunds may further weaken consumer spending and credit. In an article I read in Yahoo! Finance titled Millions of Tax Refunds Could Be Delayed , Jim Abrams writes that the inability of Congress to pass the tax bill could move the start of the tax filing season to as late as mid-February, delaying up to 31.8 million refunds for a total of $86.9 billion.
Since many tax filers count on their refunds to cover necessary expenses, it seems to me that a delay would be still another factor that pushes the economy closer towards recession.
For more on New Beginnings, check back every Sunday for a new segment.
Photo Credit: morgueFile.com, Ronnie Bergeron
This is not financial or tax advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC