Back in March, I pondered whether the economic stimulus rebate checks would have any effect on inflation. It appears that they did.

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The inflationary correlation seemed particularly true with regard to gas prices. Stimulus checks were distributed during the period May 2 to July 11, 2008. Look what happened to gas prices per gallon during the period when checks were being distributed then look what happened immediately after the checks stopped being distributed (source: US Department of Energy)…

April – week 4 – $3.65

Economic stimulus starts

May – week 1 – $3.66
May – week 2 – $3.77
May – week 3 – $3.84
May – week 4 – $3.99
June – week 1 – $4.03
June – week 2 – $4.09
June – week 3 – $4.13
June – week 4 – $4.13
June – week 5 – $4.15
July – week 1 – $4.17

Economic stimulus stops

July – week 2 – $4.16
July – week 3 – $4.12
July – week 4 – $4.01

And we all know what happened to gas prices since then. This week, I saw a gas station sign advertising $1.97 gas. I have a feeling that may not even seem that low reading this post a week or two from now.

The oil companies seemed to be very predatory during this period, appearing to think “Consumers have extra money – let’s try to get all of it!!!”

So did the stimulus checks truly stimulate the broader economy or just the bottom lines of the oil companies?

If you had read my March post and wondered if my parents went ahead and used their check to replace their kitchen flooring…they didn’t!

Judging by the headlines, today’s economy seems worse than it was this Spring when the economic stimulus was launched.

With Obama preparing to come into office, there’s talk of more “economic stimulus.” But that leaves a few questions…

What did we learn from the last economic stimulus?

And what will we do differently this time to ensure sustainable economic stimulus?