There’s something about a tax refund that just seems to burn a hole in people’s pockets, even though most say they’ll put at least part of the lump sum away in savings.
For many of the country’s working poor, this is the most money they’ll see in their bank accounts all year. It can go fast. In fact, sometimes it’s spent before a check from Uncle Sam even arrives.
Wesley Griggs, co-owner of Furniture Den USA in Nashville, Tenn., says, “Even if people don’t have their tax check, we can still get them their furniture and they have three months to pay it off, same as cash.”
Griggs says 75 percent of his customers at this time of year are spending a tax refund.
Vernon Sherden and his wife fit the bill. The couple are pre-spending their tax refund on a new living room set.
“What it really feels like is we’re getting free money, and you just don’t know what to do with it,” Sherden says. “So you do what comes to mind, and that’s buy furniture, vehicles, take vacations." He adds with a laugh, "You pretty much spend it the fastest way you can.”
Millions of families at the lowest income levels qualify for the Earned Income Tax Credit. Some of them may receive a third of what they make in an entire year and far more than they paid to the Internal Revenue Service throughout the year.
Many companies have come to depend on this time of year and even run special promotions. Auto Masters, a chain of buy-here pay-here used car lots in Nashville, advertises a match for refund checks up to $1,500.
“It may be the one time of year when they do have the revenue for a down payment,” says sales manager Adrian Longoria. “It allows us to hopefully get them in a new car truck or van...pre-owned of course.”
Longoria brushes off questions about whether he’s preying on customers. He sees the tax refund deal as a way to help people find reliable transportation.
A recent study by Harvard University's Kennedy School found only a small amount of tax refunds are spent on splurging. Sociology professor Kathryn Edin says if big purchases are made, they’re often an investment toward a better life.
"They're very aspirational," says Edin. "They have high hopes. They want to buy a washer and dryer so they can save the time they would spend schlepping the clothes to the laundromat."
According to Edin’s study, about 10 percent of refund money goes into what might be considered binge spending.
At a store in Nashville hawking stereos, subwoofers and chrome wheels, Melissa Cole is buying a sound system for the 2004 Chevy Impala she bought with her tax refund.
The mother of two recently quit her job as a gas station clerk and hopes the car will get her to her next job.
“It’s hard to save up,” she says. “I have two kids. So it’s hard to save up money with bills and kids, so when you get your refund, it’s there.”
On Sequester Day in Washington, lots of Twitter users invoked a favorite movie line to express their views on the automatic spending cuts. Some criticized the federal government; others just poked fun.
The Centers for Disease Control, the CDC, has has some success with social media and mobile applications. Its latest app offers three virus outbreak scenarios to solve.
The first? "Birthday Party Gone Bad," in which five children who attended a birthday get admitted to a local hospital with severe diarrhea. So CDC's team of Epidemic Intelligence Service officers, known as disease detectives, is called in to help investigate.
The disease detectives are real, and the app is based on real cases they have solved. It's a far cry from blockbuster video games or movies like Outbreak or Pandemic, and yet the agency does aim to capitalize on the inherent drama when disease spreads.
"People are still trying to find what that sort of sweet spot is," says Dr. Stephen Morse, a professor of epidemiology at Columbia University, "where you can have those teachable moments without obviously overdramatizing it."
He says some CDC "fun" projects, like a zombie-themed campaign in 2011, felt too far removed from the center's mission. But Morse sees the new app as a useful educational tool.
James Gee studies education and games at Arizona State University. He says games are especially good for teaching the scientific process.
"It is actually instructing," he says. "People think, 'Well there's no teacher when you use a game.' But there is a teacher: the game designer."
In this case, the game designer is a group of scientists leading you along the same trail of clues they followed. Was it the ice cream at that fateful birthday party? Or the swimming pool? Now that's problem solving.
Chairman Julius Genachowski said he is unsure if his agency has the authority to review laws passed, but he said he was concerned that the ban might be harmful to competition.
Richard Turere, 13, put his father's cows in a pen at night. That's when the trouble would start. Lions would jump in the shed and kill the farm animals. One night he was walking around with a flashlight and discovered the lions were scared of a moving light. A light went on inside him and an idea was born.
He can't do a "Jedi mind meld" with Republicans, Obama said. To which fans of Star Trek and Star Wars immediately said he was mixing metaphors.
Friday's deadline for President Obama to issue a sequestration order is neither the beginning nor the end of this year's budget battles in Washington. Here are five key moments over the next seven months, and what's at stake in each.
The much-discussed sequestration went into effect today, which means dramatic across-the-board cuts for a number of industries in the country -- including defense, health care and education. How much will this affect our economy?
"We will see in the coming months that everything will have this layer of uncertainty around it," said The Wall Street Journal's Sudeep Reddy. "We have other problems from the last fight -- from the fiscal cliff -- with payroll taxes having gone up, it's going to really muddy all of our understanding of the economy. But the sequester will hurt the economy -- there's really no way of getting around that."
"It's hard to tell where our economy is. We've had some good data, we've had some bad data. So it's not as if we have perfect knowledge of where we are in terms of coming out of this recession, so that we can tell where we're going to go," said The Guardian's Heidi Moore. "So this could go on for months. Where this would put us -- we're not on such a good path already. We're probably going to be stagnating for the next few months whether or not the sequester happens."
Listen to the full audio for more analysis of the sequester. And here are Reddy's and Moore's longreads picks for the weekend:
Sudeep Reddy suggests:
- Ninety-nine percent of the species to inhabit Earth have gone extinct. Ross Andersen looks at what could happen to humans.
- As sequestration arrives, the Hamilton Project offers 15 smarter budget-cutting ideas from across the political spectrum.
- ProPublica's Charles Ornstein on end-of-life care.
Heidi Moore writes: "In honor of the sequester and my recent obsession with "House of Cards," the great political drama on Netflix, my best reads this week are all about the culture of Washington. The more you read (and see) about the way political operatives work, the more clear the reasons become for these manufactured crises: in Washington, it is better to be talked about than not talked about."
- Marin Cogan has a brilliant piece -- full of not-safe-for-work language -- in The New Republic about the sexual politics of reporting in Washington. It's titled, winningly, "House of Cads." The story is direct, full of horror stories of awkward come-ons -- comparing professional women to porn stars, for instance -- but it also illuminates the byways of power and how it's exercised in the nation's capital, bringing to mind stories like the ones behind Claude Chabrol's "A Girl Cut in Two." The best quote in the story comes from Atlantic editor Garance Franke-Rutka: “I think journalism schools should have workshops for young female reporters on managing old men who have no game and think, because you’re listening to them intently and probing what they think and feel, that you’re romantically interested, rather than conducting an interview.”
- My second favorite read this week has to do with the fascinating dustup between veteran millionaire journalist Bob Woodward and White House economic adviser Gene Sperling. They sparred over the sequester, and Woodward soon made the rounds of TV talk shows saying that a private email exchange with Sperling left him threatened. This struck many reporters, including me, as very dubious -- nasty fights are the coin of the realm when it comes to political communications directors, who take great joy in comparing notes on the abuse they heap on reporters, and vice versa. Moreover, Woodward is as powerful, if not more so, than Sperling: the Watergate scandal and the book and movie of All the President's Men mean that Woodward's name will live in the top pages of history, where Sperling's name will be best known to political operators. What makes the whole thing really fascinating, however, is the actual email exchange that was released by the White House. Sperling comes off as conciliatory, and even a bit timid. That led to a hilarious tweet from Huffington Post political writer Paul Blumenthal: "I'm old enough to remember when the White House would out your CIA agent wife in retaliation instead sending obsequious e-mails."
- And finally, the last read of the week is this life-affirming story in the New York Times about a man who found a baby in the subway. It's the most beautiful thing you'll read this week, and maybe this year.
The zip code you live in can have a big impact on your economic destiny. That notion is at the heart of a number of local and federal anti-poverty initiatives -- called "residential mobility" programs. They help low-income families move from neighborhoods with concentrated poverty, struggling schools, and few economic opportunities to middle class places where schools are often better -- and, at least in theory, the opportunities are better too. But while there may be an economic pay off in an "opportunity area" down the road, in the short term a move to a very different kind of neighborhood involves a lot of adjustments, and many are not easy.
Some adjustments are welcome, of course. Take squirrels. If you have lived in a middle class neighborhood for most of your life, you might take them, and their scampering, for granted. But when Valerie Love and her 12-year-old daughter, Jada, recently moved to Albany Park on the north side of Chicago, squirrels were the first things they noticed.
Jada remembers how her mom began throwing jelly beans to the squirrels.
"They was coming out from every direction," Love laughs.
Their old neighborhood, says Jada, had a different kind of wildlife.
"It had bugs," she says.
While working on some home improvements -- like putting up a closet door-- they tell me about some of the other differences between their old neighborhood and their new one. In the old neighborhood, shooting deaths were not uncommon, and many buildings had been abandoned. Love says it "looked like somebody took a grenade and blew up half the blocks."
Their new neighborhood is, Jada says, "peaceful and clean." Her mom adds, "there's no gangs hanging on the corner."
Squirrels, peacefulness ... these new experiences are welcome for Jada and her mother. Love is also proud of her shiny, new kitchen, which she says the landlord used as a big selling point. "He said it's a European-style kitchen, microwave over the stove and a stainless steel refrigerator," says Love.
But there are other adjustments involved in their recent move that have been hard and uncomfortable. Love shows me her bedroom, where she's taped plastic over the windows for extra insulation in the cold winter. When her landlord visited, she says, "He said he don't like the plastic over the windows."
He didn't like the blanket either, with the face of a tiger, that she's hung over the doorway to the guest room.
"He came here complaining about that. 'You got a rug over the door.' I said 'a blanket, sir, a blanket,'" she says.
It's an unspoken thing, but even after seven months in their new world, it's easy to feel judged by a landlord over decorating choices and by new neighbors.
"In the back yard, everybody has grills on the porch," says Love. "I don't socialize too much with the neighbors in the building."
She feels like an outsider.
Changing neighborhoods can change your life Helping poor families relocate to safer neighborhoods with better schools shown to improve mobility for children.
Jacqueline Williams also recently moved through a residential mobility program -- to a middle class neighborhood in Chicago's north side. It's called Edgewater, and like the area where Valerie and Jada Love live, Williams says it doesn't have a lot of other black residents.
"The first tendency is to say, you know, I'm just going to keep to myself. But that's not going to feel good for you and you might have a lot that that community can benefit from," says Williams.
Williams says in some cases, she's faced outright discrimination. She says two landlords told her they wouldn't rent to tenants who had federal rent vouchers, and she's filed legal complaints against them. Williams says even though she feels like she sticks out -- for having subsidized rent, for being black- - she says she's trying to make connections in her new community.
"I patronize the boutiques and the restaurant. I think the alderman or something put on this annual Halloween type of thing. And there wasn't that many African-Americans there. Now I can't say that I developed friends there, but we got to meet people," says Williams.
Tracey Robinson is a "mobility counselor" with a group called Housing Choice Partners in Chicago. She's helped Jackie Williams -- and people like her -- to move, and adjust to their new neighborhoods. Robinson goes down a mental list of some of the common challenges clients run in to. One woman couldn't get used to how quiet her new neighborhood was. Another was worried about leaving behind the friends and family from her old neighborhood, who helped out with babysitting. Though once she moved, she realized the trade-off was that in a safer neighborhood, her kids could do more stuff on their own.
"Her grandchildren can actually ride the bus on their own now, and she's glad she made the move," says Robinson. "She don't have to worry."
Robinson has first-hand experience with moving from a poor neighborhood to a middle class one. Her family went through a mobility program a few years ago and she still remembers the rocky beginnings.
"It was almost a month, we were getting the cold shoulder," says Robinson.
She decided to tackle the problem head on.
"Finally, I went up to one of my neighbors and I introduced myself, and I just let her know if we had offended her in any way, accept our apology. And that's when she went to tell me about how the parking went," says Robinson.
I turns out there was an unspoken rule on her new block that everybody got one parking spot in front of their own house. The Robinsons had been parking in front of other people's homes.
"If somebody had said 'You know what, welcome to the neighborhood, we kind of let everyone park in front of our house, blah blah blah', we would have ran with that. But, we -- we didn't know," she says.
Now, because they asked, the Robinsons do know. Tracey Robinson says it was a little thing, but it made it so much easier to feel comfortable. She's been friends with her neighbors ever since.