Will there be another economic stimulus check?
By glblguy
With the recent announcement of President Obama’s $787 billion economic stimulus bill, there are probably at least 787 billion different questions. One of the top ones is “Will there be another economic stimulus check?“. The answer is No, but…
Tax Impact
The President’s new bill takes a different approach to stimulus efforts. Instead, the new economic stimulus bill will utilize tax cuts as one of many approaches to stimulating the economy. Millions of US workers will begin to see about $52 extra per month in their paychecks, starting in June. This is from a $400 tax credit that will be given out through the remainder of the year.
Couples will receive up to $800, or $104 per month. For 2010, the tax credit would be right around $38.80 per month and $77.60 for couples per month, assuming the credit was spread out for the entire 2010 year.
Other key features of the bill that will directly impact you
The tax credits are just one of the many stimulus efforts included in the bill. Others include:
- Sparing middle-income and wealthy tax payers from having to pay Alternative Minimum Tax. AMT was designed 40 years ago and never adjusted for inflation correctly.
- Extension of the $1,000 child tax credit to more low-income families
- First time home-buyers who purchase homes before December 1st, would be eligible for a $8,000 tax credit
- People who buy new cars before the end of the year can write off sales tax
- Homeowners who make their homes more energy efficient can write off 30% of the costs, up to $1,500
- College Students (or parents) are eligible for tax credits up to $2,500
- If you lose your job and utilize Cobra to continue your coverage, the government will pickup 65% of the total premium for the first 9 months of coverage.
This is just a very few small highlights of the bill which covers health insurance, state funding, education, increased assistance for the poor, the environment, and law enforcement.
Will the economic stimulus bill work?
Will it work? The jury is still out, and probably will be for some time. Although the initial reaction of the stock market didn’t make me feel real warm and fuzzy. Regardless of whether it does or not, the bill will significantly increase our national debt. How is that being covered? By tomorrow’s tax payer.
Most forecasters expect the 2009 deficit to hit 1.6 trilliion dollars. That is about 3 times the short fall from last year! According to Fox business, “The national debt — the sum of all annual budget deficits — stands at $10.7 trillion. Or about $36,000 for every man, woman and child in the U.S. Interest payments alone on the national debt will near $500 billion this year. It’s already the fourth-largest federal expenditure, after Medicare-Medicaid, Social Security and defense.”
The overall impact? Hard to say, but most likely this will impact us, our children and our grandchildren through higher taxes and reduced government services (personally I think that’s a good thing). The impact will also force additional borrowing from other countries.
What are your thoughts on the economic stimulus bill? Do you think it’s a good thing? When do you think we’ll start seeing any benefits, if any at all? Share your thoughts by adding a comment!
Photo by: Lisa Brewster
February 24th, 2009 at 11:53 am
I don’t think it will help one damn bit. The majority of the bill is wasteful pork spending on ridiculous projects like evaluating a field mouse in California. It’s insanity!
My unborn child is going to be paying for this waste of a bill.
February 24th, 2009 at 11:58 am
The stimulus that we need is a boost in confidence. Consumers, investors, and businesses must feel confident about the future before any real recovery can happen.
Ironically, at least for me personally, all these stimulus packages do just the opposite. The more money they spend on this mess, the more I’m worried about future inflation and taxes.
February 24th, 2009 at 12:13 pm
I am not a fan of the new stimulus package. I think we’ll see very few benefits, and the benefits we see will be short lived. To me, it doesn’t seem to benefit those struggling at all, aside from the govt picking up some of the Cobra premiums. But new car sales tax credit, new home credit, I mean really who is that going to help? $13 a week in our paychecks, wahoo!!! We’ll end up having to pay that back at a very high interest rate over the next few years. And the deficit is just a joke. Its hard to tell people to be smart with their money, when the govt is blowing it every chance they get.
February 24th, 2009 at 1:07 pm
I think the government should reduce costs by reducing their pay and benefits like many employees are forced to do.
Much of this package is pork under a different name.
February 24th, 2009 at 2:39 pm
Hi.
I wanted to suggest that you cover up some of your personal info on the envelope you are showing on your blog. I work in the “information” arena and unfortunately, have seen many cases of ID theft. I’d hate for that to happen to you. Anyway, I’d cover up your middle initial and address so it’s not “out there.”
Thanks for your helpful and interesting blog.
February 24th, 2009 at 3:00 pm
I don’t feel that I have been informed enough to decide if this stimulus bill will be helpful or not. I think there are a lot of rumors circulating out there. I think these economic times have forced more people to look at their finances honestly and become accountable as to how they spend their money. Now, I do believe that there should be more auditing of large businesses and industries that are turning to the government for help. I think that if they’re going to get $$$, then there should be a government-appointed auditor combing over everything. And I think that beginning at the local level, government needs to trim back the fat.
Thanks,
Liane
February 24th, 2009 at 3:38 pm
I don’t think the stimulus bill is going to do much good at all. In fact, i think it may do more harm than good. I did a post on my blog recently about how the Congressional Budget Office (CBO) said that they thought the stimulus may do more harm than good long term.
Only 20% or so of the “stimulus” spending is happening this year, with the rest of it being back loaded and not happening for years down the road. Not sure how that is supposed to stimulate things to get moving when the recession is happening now?
In my view the stimulus is really just a pork project payback for the folks who put the current administration in office, and it won’t have the desired affect.
I hope I’m wrong.
February 25th, 2009 at 5:57 am
I don’t think the stimulus will do what it’s supposed to do. I think just like the other bailouts, the results will be minimal at best. I don’t think it will create the millions of jobs that it is supposed to. It’s a bad deal.
February 25th, 2009 at 7:27 am
While I like taxpayers getting to keep more of our hard earned money, I don’t like what they (the self-proclaimed “experts” in government) want us to with it– SPEND!
February 25th, 2009 at 8:42 am
I agree with… pretty much everyone else here. I don’t think the stimulus package will help much at all. It will offer a little bit of help to a few people, but the benefits will not reach the majority of Americans.
Personally, I’m a bit upset that there won’t be much benefit to wealthy people. I’m big fan of the “trickle down effect” that we once enjoyed when things were going well.
My husband owns a plumbing/HVAC business that works primarily building weekend homes for wealthy people from NYC. Things have slowed down since they’re watching all their money get flushed down the stock market drain. If they don’t have enough money to blow on fancy houses with fancy fixtures, we don’t have the opportunity to work and EARN money.
Give me an opportunity to work over a one-time handout any day!
February 25th, 2009 at 8:57 am
I think a lot of people are tired of the government, especially over the last several years, being incredibly irresponsible with public money by overspending AND giving tax cuts at the same time. Now ANY new spending looks bad because we’ve been conditioned to see a lot of spending with little benefit.
This package is designed to create jobs. Somebody has to study that field mouse, somebody has to make, deliver, sell, and service that car that has a tax break on it, etc.
There’s a lot of old saying that could apply here: “Scared money never wins,” “You have to spend money to make money,” etc. You all think that your kids will have to pay for this, but not if WE all pony up and force our representatives to honor the pay as you go system. Tax us NOW rather than our kids later, or cut spending, not one or the other.
There’s also a lot of criticism for spending beyond means, yet I know at least a few people here have mortgages which bought houses for which they could not pay cash — in other words, you couldn’t afford them. So you obviously clearly understand the relationship between taking on debt and eventual wealth. The idea of this package, like any stimulus, is that the eventual value of all of the money spent will be greater the actual dollar amount. If the government spends $1, the hope is that eventually the economy will return >$1 in benefits to all of us.
February 25th, 2009 at 10:53 am
I don’t think this will benefit my family at all. I’m self employed and my hubby is 1099.
February 28th, 2009 at 10:27 pm
Actually, there are going to be stimulus checks sent this year but you have to be receiving Social Security to get it ($250).
Also, the new tax withholding schedules have already been released so the extra $ should start showing up in your check by April.