What Uncle Sam Gives in Rebates, OPEC Takes, Stalling Economy

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May 5 (Bloomberg) -- Wal-Mart and OPEC are battling for the tax rebates the U.S. government began handing out last week. The result may be a draw for the economy.

While consumers might spend enough of the $117 billion stimulus at retailers to keep the U.S. economy afloat in the months ahead, the boost from their purchases will be diluted by gasoline prices at $3.62 a gallon and rising.

The upshot: The U.S. might avoid an outright contraction in the second quarter and still be saddled with sluggish growth typical of Europe, which expanded at a 0.9 percent annual pace in the six quarters following a 2001 recession.

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"A lot of that stimulus money is going to go to filling the gasoline tank and the refrigerator," says Mark Zandi of Moody's Economy.com in West Chester, Pennsylvania. "It's not going to be quite the boost that most of us were hoping for when it was put together a few months ago."

Bloomberg

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1. Just another gift from Georgie to his pals.