Has President Bush’s genius plan to save the US economy worked? It has if you’re an oil-rich foreign nation, says Bill Bonner in The Daily Reckoning.

The New York Times reports that “Stimulus Checks Boost Spending.” According to a Commerce Department report, US consumer spending rose by 0.4% in May — a nine-month high — thanks the $48 billion Bush et al sent out in the post.

Job done? Economy saved?

Not quite.

The 0.3% gain in wages and salaries for the month was cruelly offset by the 0.4% monthly rise in the (official) inflation rate.

And if you excluding the one-time-only extra cash pumped into the economy from the tax rebate checks disposable income adjusted for inflation remained flat. So unless Bush plans to splash out on another $48 billion, it looks like little has changed.

The problem with all this stimulation, says Bill Bonner, is it’s stimulating the wrong economies. Stimulated Americans simply go out and buy gasoline and other imports, thus stimulating every sandy oil producer in the Arab world…

“One Rebate Not Enough,” is the headline of an article written by Robert Shiller, appearing in the New York Times.

Shiller says the feds’ attempt to bail out consumers with tax rebates is too puny to do much good. Besides, he says, much of it ends up stimulating others peoples’ economies.

You’ll remember our explanation of the world money system. The Fed is no longer America’s central bank. Now, it’s the world’s central bank. But it’s a funny old world. The Fed provides money — currently at less than half the rate of consumer price inflation — in order to stimulate the economy. And it does stimulate the economy…the Chinese economy! And the Russian economy! And the Iranian economy (the fourth largest oil exporter in the world)! And the economies of every sandy oil producer in the Arab world!

So do the feds’ ‘tax rebates.’ Americans spend the money on gasoline and other imports. Rebates were intended to be a “booster shot,” for the U.S. economy, said President George W. Bush. But it’s the foreigners, not Americans, who are getting the boost. The foreigners build sparkling cities. They throw up huge factories. They roll more automobiles off the assembly lines… build more railways… pave more highways.

Yes…and even store more food. Comes an article in today’s International Herald Tribune that tells us the foreigners are “hoarding” food…and that his is pushing up food prices even more.

Meanwhile, in the U.S. of A., hearts break…and the lonely wind blows through empty houses.