Global Macro Speculations suggests that, if all else fails, the FED can simply print up a bunch of bucks and mail ‘em to us:

“Here’s how it would work, the administration working with congress would receive a advice from the Fed chairman to go ahead and issue a tax cut to virtually all citizens for an gigantic amount(Say 50% of US consumer spending, $5T), the fed would stand behind the bond auctions and monetize to make sure the government would have no problem financing it. The US consumer would suffer an gitantic ‘wealth effect’ of receiving such windfall gains in networth and its very likely to spend a significant fraction of the tax cut(as the history of the wealth effect shows, people spend when they get big jumps in networth).”

But of the $5T it may be, with the current propensity to save, that only about $1T will be spent….maybe that will still be enough….  As an indicator of what folks would do with a “printed windfall”, take a look at the comments to Smart Money’s request for responses to their question: What Would You Do With $100,000?

Here’s a couple of example responses:

50k to charity/church/world missions
25k would be invested in equities
13k would get spent partly on an engagement ring/honeymoon
12k would go to parents debt payments

pay off $34,000.00 mortgage.
keep $20,000.00 in interest bearing saving account for ‘rainy day ‘ expenses.
buy $40,000. in high interest preferred stock.
Donate $1,000.00 to charity

The responses indicate they will definitely NOT go on a shopping spree…many more simply want to pay off debt burdens.