Still looking for your stimulus check? I dissect Obama’s stimulus package and weigh in on the government’s money plan which covers tax cuts and government spending.
The 2009 economic stimulus package is the big news out of Washington over the last few weeks (or days). You can’t escape the buzz about it. And while the people in power sit, stew and argue about all this, all we can do is wait to see what kind of huge price tag emerges from all their negotiations.
But I’m fascinated. I want to see what it is that the American public will be paying for, for decades to come. So I’m planning to keep tabs on the plan details right here.
Cost of Obama’s Stimulus Package
How much are taxpayers going to be out for? As it goes, I’m finding it hard to grasp the enormity and meaning of spending in the trillions. My brain can’t wrap itself around numbers like this:
- $790 billion for the Obama administration’s stimulus bill.
- $700 billion for the Bush administration’s bailout plan.
Already, that’s almost $1,500,000,000,000. All those zeroes get me dizzy. Add the trillions to an already massive deficit and the future looks stunning. I’m not surprised that there’s some heavy opposition here by the Republicans, particularly John McCain, who would have stonewalled on this (if not vetoed any plan) if he were voted President.
If you think about it, this just means that we’re out this money over the long term as we hope and scramble to find ways to pay this back. Banks who borrowed from TARP funds should pay those loans back with interest. Future generations are going to be paying this back through tax hikes when times are (probably) better. But for the short term, we can only focus on that “stimulus check” in the form of tax cuts that will alleviate the current financial pain most of us are facing.
House vs Senate Economic Stimulus Package Proposals: The Spending Plan
Here’s how the package breaks down: 35% of the bill will be allocated to tax cuts while 65% will be for spending.
Because I like pretty pictures very much, I’d like to present CNN’s pretty pie charts on how the taxpayers’ money will be spent. Things will morph over time and if they do, I’ll make updates as I find them. So here’s where the 65% of the $790 billion is supposed to go, as per dueling plans in Congress. The missing one third of the stimulus plan (not illustrated in the charts) is supposed to cover tax cut provisions (more on this later).
Obama’s Plan: No Stimulus Check, But Tax Cuts
So what’s in it for us? The 35% of $790 billion is reserved for us working folk. Lots of people are looking for an economic stimulus check, but we’re not getting a physical check this time around. We’re getting a bunch of tax breaks, the main item being this one: a tax credit for workers.
The original plan was to give out a $500 tax credit for individuals and a $1,000 credit for earning couples, but these amounts have been reduced by 20% as Congress wrangles on. The revised tax credits are now for a whopping $400 for individuals and $800 for couples. And you’ll only get full credit if you earn $70,000 or less per person.
Here are the final details of the package.
Criticizing The Plan
Here’s what the critics are saying:
“More than one-third of this bill is dedicated to providing tax relief for middle-class families, cutting taxes for 95 percent of American workers,” says the Senate Majority Leader.
Supporters say that this will turn our economy around. The critics (e.g. Republicans) b**** that there’s not enough here for us working families, while the funds are being shoveled into wasteful government spending programs. Well, from what I’m seeing there could be some truth to that.
My Biggest Concerns: if you look at the charts above, it shows how the big money is going to general spending, with a large chunk reserved for “federal and state government”. And if you look into the details more carefully, you’ll see funding going to things that don’t necessarily promote economic revival.
Is this fat stimulus package supposed to include spending for pandemic flu research and the purchase of green, fuel-efficient government vehicles, with between $300 million to $600 million earmarked for this? I’m all for supporting those goals, but do these belong in a STIMULUS plan? Fine and dandy, while we await our $800 tax break right?
Can We Revive This Ailing Economy?
This stimulus package is something they all say we need right now….desperately. The US economy is like a comatose patient who needs to be revived. The economy needs the stimulus bill like a dying patient needs critical health-restoring treatment and nasty-tasting medication. We’re told that we need this spending to create and save millions of jobs and to avoid an “economic catastrophe” (Obama’s words, not mine).
And when our comatose patient finally reawakens and gets back on track, he’ll be haplessly saddled with massive bills for a long time to come: the price he pays for making the biggest financial mistakes he’s ever done in his life.
What do you think of the economic stimulus package?
Copyright © 2009 The Digerati Life. All Rights Reserved.
{ 57 comments… read them below or add one }
I love your analogy about the dying patient needing to be revived and then living to pay the bill. It’s very apt. Just as the patient can’t take the time to review the cost of the care he’s receiving, we may not have time to review the cost of the care we’re receiving. It’s unfortunate that the people who are supposed to be looking out for us (our representatives) aren’t all dropping their personal interests and leaving out EVERYTHING that isn’t immediately needed, perhaps because they don’t know either.
I don’t know about flu research but I suppose a big government contract for fuel efficient vehicles will stimulate the car company that receives it and, by extension, the workers who’s jobs may be saved in order to fill that contract. That’s really the problem, we as individuals are not in a position to evaluate all of these programs ourselves and almost all of this spending can be spun as either beneficial or wasteful depending on whether the spinner is for or against that particular program.
I don’t think we can afford to do nothing and I’m afraid whatever choices are made, some will be good and some will not and we will sorting out which is which for a long time to come.
Good analysis. NPR ran a segment the other day and pointed out that the “package” put together by Roosevelt post Depression caused massive government debt (but in the end the debt was justified). While our current economic condition is not as severe as what we saw during the Great Depression, I’d argue that government spending is needed (given that consumer and business spending is non-existent, in addition to the fact that the bank bail out package put together for the banks did not, as planned, encourage the banks to lend). Let’s hope that the government spending plan works, because we are running out of options.
Cheers,
Scordo.com
Nice insightful post…I have bookmarked your blog. I wonder if Obama can pull this off…it doesn’t seem like the stock market thinks so…we will just have to wait and see.
I suppose in any personal finance blog I should expect a personal view, but I feel that this post has a horribly one-sided view of the stimulus plan. At no point do you mention the positive points of how the government spending may help us get out of this recession.
You move from promoting John McCain, to bashing the spending, to praising the tax cuts, to a graph of spending with no words on how it could help. Back into praising tax cuts, to promoting the Critic’s view without presenting the supporter’s view. You close up with bashing spending again. See the thread?
I’m disappointed.
JTP,
Would you share with us your opinions on the stimulus plan? I’d love to hear what you have to say. I’m not out to bash any program, just trying to bring up a discussion and start out with a few thoughts about it from the get go. Rather than criticize bloggers (which you’re free to do, of course), it would be great if you could chime in with your opinions on the package.
I may have come off somewhat self-serving about tax cuts, but I’m betting that this is the angle that many people take — most people I know have become very myopic about how they view the world at this moment, and I can’t blame anyone for doing so, given how challenging life and finances have become for so many.
I’m not big on big government in general, but I’m hopeful that this whole plan will play out the way it’s supposed to. We all want this thing to work out.
But I doubt anyone can deny that this thing comes at a tremendous cost.
Thank you for your thoughts, I’d love to hear more.
P.S. I don’t believe I’ve promoted John McCain anywhere, to the degree you imply.
How is buying green cars for the gov’t NOT stimulus? Somebody has to build those cars…I’m guessing it will be the Big 3 automakers. It forces the US automakers to upgrade to green tech without much risk, since they know that they have a buyer for all these green cars.
Once the US automakers are set up to make green cars and sell them to both the gov’t and the public, in the long run that will help the environment and get us off foreign oil. Getting off foreign oil also has the added benefit of not spending $700 Billion in the Middle East on crazy wars, and keeping that money at home instead.
edit: I didn’t read the link. Yeah…buying green golf carts is pretty much bull s**t, but I stand by what I say about buying green real cars for the gov’t.
Kevin,
I appreciate the analysis. Yes, I agree that the intentions behind green vehicles are good, as long as “they” stick to conventional vehicles. 🙂 You make great points.
SVB,
I’ve been reading yours (and a dozen more) PF blogs for over a year, but this was the first time a post inspired me to comment. Maybe it’s a good thing you had a post I felt I could provide a counterpoint to :).
It’s really the myopic views that you refer to which are common amongst nearly everyone that caused this recession. Home buyers saying “I can’t afford this long term, but I can get it now!” Mortgage brokers saying “This loan is no good, but I can sell it to investors now!” Bernie Madoff saying “This scam will end someday, but I can make money now!” Wall Streeters saying “These can’t go up forever, but I can cash out now! And still make a bonus”
Back to the stimulus.
To take the couple items you mention: Pandemic flu – Mass sickness kills productivity. You’ve probably heard the statistics of how much work is lost during flu season (or March Madness) when people aren’t working. Some money into research now can help prevent a hit later. There are probably thousands of researchers dependent on grant money to further their findings. These are jobs just like carpenters and electricians. They may even be cheaper to pay!
Green cars:
A very non-myopic facet of this stimulus plan is “What can we do now that saves us money later?” Green cars are a part of that. By replacing inefficient vehicles with efficient ones, we lessen our dependence on oil, put money in to the economy by buying the cars, influence manufacturers to develop even more green cars.
JTP
P.S. It just looked to me like you were saying “If John M. had won, we’d be better off.”
This is not an efficient stimulus package. Obama and the rest of the democrats have already demonstrate to not know what the are doing with his recent comments saying something like “I don’t understand all these complaints about the spending in the stimulus package. What do you think a stimulus package is?” So he basically admits that he believes stimulus = government spending. Stimulus will cost the Government money, but it should not be in the form of welfare. Most of the spending is welfare one way or the other to specific industries and the problem is that is only a short term fix. The stimulus package should be incentivising people and companies to create jobs and invest. It should be cleaning up the financial issues weighing down companies, banks, and individuals, which would allow them to invest in new ideas, start companies, and buy houses.
I can’t go into all the details in this comment, but will soon when I have a chance on my blog.
There should be no spending on education, defense, and agriculture in a stimulus plan. These are all examples where congress is trying to funnel money to their constituents. These area might need funding, but not as part of this bill. It should could out of the normal operating budget.
In addition, all stimulus should be effective in 2009 not 2010-2012, as much of it is. Giving everyone tax breaks that amounts up to $800 is another band aid that was tried last year with no long term success. Instead, cut taxes on companies and small businesses. Allow them to depreciate all equipment purchases in 2009. Provide tax relief on purchases of foreclosures and all house purchases. Develop a comprehensive energy plan that is more than just light bulbs. One idea I’ve heard mentioned is converting the government fleet of vehicles to natural gas. This would include mandating new purchases, and possibly retrofitting current ones. This would benefit car companies and local small businesses, clean up the emissions (60% less emissions), and lessen our dependence of oil. This would also fund infrastructure upgrades and eventually allow consumers to begin transitioning to this technology.
Those are just some ideas, but unfortunately with this many people working on the bill we can never get a efficient stimulus plan. Designing anything by committee just leads to too many compromises and a bloated price tag, as each side will concede on something to get their piece of the pie.
@Everyone,
Thanks for your insightful comments. I thank J.D. for providing the thoughtful arguments and issues that I was remiss in expressing. I am not against spending per se, but would prefer for the spending to be in the right place. But what the “right place” is, is a matter of debate — it boils down to how you define the stimulus bill and what you’d expect to be in it.
I’m all for pandemic flu research (all the more so as I’m a hopeless hypochrondiac), but it seems a stretch to see it belong in a stimulus package (in my opinion it should be tackled in a different budget) — but ask a politician with an agenda and he/she can make a solid and convincing argument that their cause can and should belong in the package du jour.
As SimplyForties pointed out, anything looks to be fair game here as people lobby for their cause to be heard and supported by this bill right here, right now. Sounds like “stimulus” is the magic word to use to get funding.
That other case in point: the whole green initiative is a wonderful thing as long as it doesn’t turn into the pork that some people — jokingly or not — are warning us about.
Unfortunately, it’s just the way it is that we can’t really implement a purely efficient package. Just as demonstrated here in our small scale forum (a microcosm of what must be taking place in Washington’s chambers) we all obviously have different view points about what should or should not be in the bill.
I’m afraid that a lot of bloat will be part of this package — it’s just the nature of the beast.
P.S. JTP, it’s one thing to express understanding of a particular opinion/view (e.g. of McCain’s) and another thing to say that I support and believe in that particular view. That’s a little bit of a jump. 😉
I think this entire stimulus package is downright irresponsible. Of course, what could we expect from the same bunch of people (on both sides of the aisle) that got us into this mess thanks to overspending.
Recessions come and go, and some cut a little deeper than others, but the worst thing we could do is try to spend our way out of it with money we don’t have. It’s as futile as trying to pick up a bucket while standing in it! It’s a recipe for disaster, and one that our kids and grandkids will have to contend with for generations to come.
An economic stimulus package is just like aspirin. It provides relief but it doesn’t cure the problem. But hey, I am not against it. I still take Tylenol for my headaches. I can just imagine how much Tylenols I can buy once I get my check!
Frugal Dad got me thinking. While I did say I am not against the economic stimulus plan, I am not entirely supportive of it. We know there’s a catch somewhere. Beware of wolves in sheeps’ clothing. In life, there’s a time you win and there stimulus! (I hope you got the pun)
@Frugal Dad,
Agreed! Just like spending or budgeting in personal finance, once we don’t have the money, we clearly need to cut to the bone and truly target only essential spending. There’s all this theory that spending here and there will get us out of the hole. It runs contrary to what we take for granted in personal finance theory — and there’s even been criticism that too much saving is bad for the recession. If huge “spending” turns this sinking vessel around, then color me enlightened (and relieved). And we need that vessel to turn around so that we can focus on making the bucks to successfully pay off our debts going forward.
@Fischer,
Love the pun, thanks! 🙂
There is one thing that particularly attracts me in any discussion about the current situation. That is the emphasis on recession and the lack of emphasis on the financial sector’s problems.
It can’t be emphasized enough that we face two problems today – one is a recession and the second one is that the banking sector in most of the developed world is insolvent.
There is a reason why the stimulus package is 789 billion while the bailout package is 2.5 trillion dollars.
As such classical economic theory – Keynesian or Friedman is not enough to analyse this problem holistically. The best frame of reference is the lost decade of Japan – but I don’t see that coming up a lot.
I wish these stimulus plans were quick fixes, but they are not. So much time goes into analyzing the stimulus package and it makes for a great debate. I suppose we’ll have to wait for hindsight to really compare Bush vs. Obama with regards to the stimulus plans. Unfortunately for presidents, the plans they sign most likely won’t have the huge positive effect they are looking for within the term they sign it into law. That’s what makes it so difficult to have a positive public opinion as president.
The problem with cutting taxes right now is that no one is willing to spend. Any additional breaks in taxes given to small businesses are going to either be saved or used to pay down existing debt, not invested, not used to make new hires. Working at a small business and being familiar with many many more, I’m seeing a ton of people sitting around with nothing to do. So, tax breaks = zero stimulus. This is what we’ve gone through the last eight years.
Regardless, Manshu is right. The stimulus is a sideshow compared to the mess in the financial sector right now. Until we wise up and get tough with the banks, not giving them and their shareholders blanket subsidies, we are going to remain in this mess. Unfortunately, the Obama administration is looking to do all it can to keep the status quo. Welcome to the lost decade.
I have read your article and I agree with you on several points. Our economy is in dire straights and the government is not helping. I have been unemployed for over 6 months, with no prospects in sight. The stimulus package is for big business. The talk about helping middle class families is bullshit. The middle class families need more than a $800.00 tax credit and $13.00 more in their weekly pay. That is an insult to me. Families losing their homes because the banks became greedy and loaned money to people that could not afford the mortgage. I worked in the real estate industry and I can honestly say that is where this recession started. The government should not have bailed out the banks that practiced loaning money to individuals that could not afford to pay the money back. Now the entire country is in dire straights because of this. Plus, if the american people can not find jobs, why in the world does the government want to give you a tax credit for buying a new home or a new car. Does that make any sense? No, it does not.
The patient may be saddled with debt when he recovers but at least he’ll be alive.
Look – I am against wasteful government spending, but with the way the economy is declining a stimulus is required. In today’s partisan environment it is very clear that democrats and republicans cannot agree on a solution (in spite of Obama’s sincere efforts). So we’ll need to take what we can get.
Is the package a good one? I don’t know. But I do think it is a good idea that we have a package. I also think that Republicans have taken a very big risk by declaring themselves to be the party of “no”.
There is too much spending in this bill that will NOT stimulate the economy. Over $4 billion to groups like ACORN???? Give me a break… this bill is less about stimulus and more about increasing the power of the federal government and rewarding certain interest groups. For those who think that massive government spending is necessary to get us out of the current recession, you might want to read up on US history and see how it worked out for FDR in ending the Great Depression.
Cheers,
Ken
In response to some other comments… I still contend that the stimulus package should not be aimed directly at providing people currently struggling with their bills, whether due to loss of their job or lower incomes. The reason being that the government cannot possibly provide those people with enough money to live on. Just look at how much it will cost to give those making under $70k, $800. Instead it has to be focused at the root causes of the current markets, namely the credit markets and housing, both of which are interconnected. Unfortunately, much of the blame for the problems in each are self-inflicted by the industries and the government. However, if we are to get better, we need to stop the finger pointing and worry about what can be done going forward. The financial market is so interconnected that it is not possible to be vengeful and only help out those companies that are deemed to be innocent in all this. There is also a lot of self-correcting that has to occur. The fact is that the previous strength of the economy was propped up by easy lending practices, low rates, and legislation. This created a runaway industry, too much building, too much buying, too much wealth by homeowners, that used their new found equity to fund many other purchases. There is no doubt that if left up to free market forces the housing market will self correct, but the mechanism is painful. One major point of new regulation and stimulus is to prevent these huge swings of boom and bust, since the free market is just too volatile. However, the credit/banking markets can literally collapse if not backstopped by the government. All the efforts so far have been in form of loans or investments by the government and provided this helps, should be repaid. The country’s economy cannot survive without a viable banking system. If there is no reasonable credit available, there is no business or industry that can operate and be as prosperous as we have been over the last 50+ years. Small businesses need lines of credit to make payroll. All businesses use loans for major investments in equipment, other companies, and growth. This industry is so critical to our way of life that it needs to be the top priority and revived first and the rest will follow.
Again this needs to be stimulus, not welfare. We can either waste our time treating all the symptoms, or attack the root cause. I would always choose the latter.
To some extent, too many people spending beyond their means is what got us into this mess in the first place. So I wonder how the government doing that same thing will fix it.
I believe that some kind of stimulus is needed. I wish I could believe it’s this one.
@JTP – what you are saying is that these couple of things are good things for the future. But this is not the purpose of this bill, the purpose of this bill is to stimulate the economy and create jobs now. When people are working again, they’d pay more taxes and than other good things can be considered. But spending on anything that is not going to increase employment now shouldn’t be in this bill, IMHO. You mention two things – how many jobs each of these items will create in 2009 and 2010?
@Ken – it was the war that ended the Great Depression. The war resulted in large government spending, larger than Roosevelt’s previous failed attempts. Incidentally, the war also messed up the picture a bit i.e. we don’t know how everything would’ve played out without it.
@Frugal Dad – the economy doesn’t always recover from recession on its own. Reagan tax cuts got us out of recession and double-digit inflation in the early 80s. The war got us out of the Great Depression. How did the war help the economy if not for the massive spending?
@Alison – there is borrowing and there is borrowing. A business borrows money to expand. Someone with a great idea may borrow to start a business. Both of these has a potential to get higher returns later. Same here. Unemployed people don’t pay taxes. More unemployed = less taxes = higher debt. Spending that can put more people to work has a potential to return the money later on and with interest. Assuming it is the right kind of spending, and I have my doubts about this bill.
I tend to agree with J.D. Fournier. Banking industry is critical. Our righteous indignation isn’t going to get us anywhere. We need more details on how they plan to help banks. So far all we had was just a bunch of very general plans with no specifics.
I do think that additional stimulus may help as well, but it has to be the right kind of stimulus – the one that actually helps businesses that could hire people and that works fast. There are some provisions in this bill that may help – e.g. investment in technology and infrastructure. Some of infrastructure spending will go to illegal Mexican workers, but there is some technology involved in building bridges which may help some tech companies; there are also companies that produce parts. But there is also a lot of pork that we can’t afford now. Also, a lot of money in this stimulus isn’t even going to be spent until 2012. How will it stimulate the economy now?
Do folks on social security get a check of $250.00 in stimulus package?
Baumgardt,
The short answer is YES. Please check out this article.
i feel the same of the stimulus package it’s a beautiful idea but the money is still going to an fro it’s not going to heal the wounds so to speak the way they should be healed. saving the banks over the people is mistake number one. the government must relize sometime soon we hope that without the intrest and support of people’s personal life’s in full saftey in such a trillion dollar a year market called “AMERICA” things will start to decay.. that 2.trillion for banks was unmanaged . but i like obama’s behavior very hopful as long as he converts his wonderful speechs to wonderful jobs around this country hil be fine. but with all do respect this is our best bet in this situation i agree with the stimulus but not with all the usages and the to and fro money wasting inplaces.. if the people arent takin care of the machine dies period. you cant save a country of america’s power with out first satisfying that which makes it run.. the people’s personal lives which include work,familiy, food, and the correct means and abilities givin by a government.. but i still belive in fruitful America ,things will still turn correct again i feel . the start of a new era of AMERICA needs to start old fashinoed with the people first and everything else secound that ‘s the recipe really… for a succesful America once more ….
I am a gulfwar vet do we receive any sort of help from this stimulus package.
Will veterans receive a stimulus check or increase in disability payments.
Print the money. Don’t borrow it. With the destruction of wealth the money supply can handle $3 trillion in freshly minted bills. There is no reason to *borrow* $3 trillion dollars. Do what Lincoln did: print the money.
Percy Parker,
Here is the full list of details of the package. Here is what’s in store for veterans:
The stimulus plan is confusing to say the least.
Is it a sure bet that people will get their money in June added to their pay checks, or is their a chance that their employers who are struggling to stay afloat will pocket it?
I have spoken to some people and they seem to have the same concerns that I do.
Yeah…..so I am not employed, and this going to benefit me how?
How about instead of once again wasting 800 billion dollars by giving it to CEO’s who end up spending the money on bonuses for themselves we give each person a check for anywhere from 100,000 to 1,000,000. People would have more than enough money to pay bills, mortgage,etc. This money would boost the economy greatly. Why spend 800 billion when you can spend no more than 450 million. What the hell is 400 dollars going to do ? Pay a phone bill and fill my car with gas. WOW! I’ll still be out of work with tons of bills to pay. I just think the rich people in office are wasting money that we the poor are going to have to pay for , for a very long time.
Thank you
The best plan to get the USA back on track would have been to not take any FITW of FICA tax from everyone’s pay for the first six months of the year. In so doing, all of our pay would have been greater thus giving the opportunity to pay down debt, buy consumer products, eat at restaurants, and possibly even save money in a Roth IRA.
There would have been no overhead from printing and mailing out checks nor wasting employees time by coordinating all of those same checks.
The biggest problem with government is “POWER”. When a person gets elected to be either a senator or congress person they get swept up in the “POWER” of it all, all the perks of being in the Washington DC political arena. Think about it…if you could spend one or two terms in office and then get a lifetime retirement, including medical & dental, why would anyone (in their right mind) want to stay beyond that? They could return to private practice and own their own business or be an executive in the corporate world. Noooooo!!! It is the “POWER” of it all.
I do not think that our founding fathers ever thought that anyone would make a lifetime job out of being in Congress. It is not good for our country for someone to do that. Look at people like Byrd from West Virginia or Ted Kennedy from Massachusetts. These senators did, are doing, and will continue to bring “PORK” projects into their states because of the seniority that they enjoy by making a lifetime of being a senator.
Just think of the tremendous discussion of knowledge that could occur if we had term limits in place. Lobbyists could possibly disappear. There would be hopefully fewer or no more earmarks in legislation because there would be critical thinking going on to insure the growth and prosperity of the USA not just trying to bring projects into their home states or to save some endangered species, etc.
The stimulus plan that has been approved now (that nobody read) is outrageous! Barney Frank and Chris Dodd should both be brought up on charges and put in jail for what they did in the housing debacle. All of the Freddie Mac and Fannie Mae executives should be brought up on charges or make to give back their salaries during their tenure. Nancy Pelosi should keep her mouth shut and let the Pope lead the Catholic World. Harry Reid should also be looked into for all the fraud, waste, and abuse he has done in Nevada as well as in Washington DC. And not to be forgotten, that congressman Murtha from Pennsylvania who dissed the Marine Corps (calling them baby killers and worse) shold be brought up on charges, put in jail, and convicted of treason.
What am I missing here? I am a Viet Nam disabled veteran and a 16 year old kid working a minimum wage job makes more from this plan then me. GOD BLESS AMERICA
I payed by the rules all my working life, purchased a home I could afford, did not carry balances on credit cards, saved via 401k for retirement as urged by employer. After 37 years of planning a carefree retirement I retired Oct 08 just before the s*** hit the fan. I am still about 18 months from being eligible for SS and I cannot use 401k monies as that has dropped like a lead balloon to a loss of 40%. Now…I ask what about all of those of us who are not now working….how are we benefited from all the tax breaks and give aways?
I am with you Joyce even though I am not of retirement age. My husband and I worked VERY hard coming from humble backgrounds, putting ourselves through college without loans, 60+ hour work weeks, buying within our means – and it finally paid off with my husband landing a well-paying (more than $250k) job five years ago. With this new income, we saved more than half of his paycheck (I now stay home with the kids) and put it into mutual funds. So basically we bought at the height of the market because that is when we could afford to invest and now it is worth less than half plus we will be punished by the government because we make more than $250k per year.
This is so wrong – we re not wealthy people, we will not be inheriting money form our parents in fact soon we will need to help them out financially. I am planning on going back to work (thank god we still need accountants in this economy) so we can try to recover what we had.
$250k a year is not that much – we don’t drive fancy cars, we live in a middle class neighborhood, I buy our clothing on sale at Kohl’s and outlet stores, I clip coupons. We put our money into the market, 401ks and a house (we own 2/3 of it) and now have hardly anything to show for it. In hindsight, we should have gone against our morals and overspent like most of America and waited for the government to bail us out.
Well this is great, Here in Austin Tx, were getting a $800,000 frisbie golf course out of it.
This will be very stimulating for the un-emplolyed and / or homeless. HaHa
The only way to get the job market going is to give incentives to the people who create them and while focusing on the energy sector seems like a good idea what about all the rest of the jobs that went offshore? Why not bring them back? Hundreds of thousands of jobs were lost in the textile and apparel industry and yet Michelle is photographed daily wearing imported clothing from J. Crew ( and just announced layoffs) and Narcisco Rodriguez Italian made suits. She gets a photo op serving meals to the homeless while her husband organizes a summit saying in his opening remarks that 1.5 million people will lose their homes by the end of the year.
I don’t think you can “stimulate” a country that has lost it’s national pride along with it’s GNP.
I’ve actually got a question about how this whole tax break is supposed to work. My understanding is that they are cutting the amount of taxes withheld from our paychecks which is what they are calling a “tax break”. This is supposed to give us a few more dollars on our paychecks to “put more money in our pockets.” My question though, is along with this, are they actually cutting our tax liabilities? Or, will we still owe the same amount of tax at the end of the year which would basically just mean our tax return gets smaller since we paid less tax during the year.
No one in Congress, or the Government can help. You can’t borrow your way out of this mess, you just have to “PRAY”. Sounds corny, this is our only solution. The more Congress borrows, the more we pay, an the more we lose. Just look at this picture: US has over 303 million people, and Congress has given almost a trillion dollars “AWAY”, each person in the US could receive 2 million dollars and pay all their bills, including mortgages, and credit cards,and we’ll still not get even close to 100 billion dollars. This would jump start the economy, relieve stress, and make you proud of your country, and make it financially strong again!
Is the stimulus package just for working americans? I am retired and did not receive a tax cut in my April paycheck. It was my understanding that beginning in April individual’s paychecks would increase around $60.00 per month because of the tax cut. Surely this did not exclude retired Americans who are living on a fixed income.
you know i am not sure if this stimulus plan is exactly the right thing to do, but atleast obama is trying something. i am sick of the rich getting richer while people like me in the 30k range are getting poorer. the middle class person is the backbone of this country. and it is time they get a break instead of more wieght on there backs. and as far as the big 3 go what were they thinking to send all the manufacturing jobs out of the country. did they think car buyers would have magic money just appear to buy there cars. lol take the jobs away and see what you get. i hate not having as much money as i have in the past, but alot of the big businesses in this country need a wake up. too bad it is average joe who pays the price first.
I don’t really know whether or not the stimulus plan was the right thing. This whole Federal Reserve issue with the debt, is getting quite confusing. I haven’t noticed much happening after the stimulus package. In the late 1700s when America was in heavy debt, we simply paid off all of that first, and we were ok. Why can’t we do the same here, before we get into the whole stimulus package?
If I could turn back time, I would have never deposited the first check, much less, the second. Looks like we’re all being “bought” to me…and cheaply.
I hear much talk about government control, socialism, government overspending and so on. The US government is the largest employer in the U.S., with over 1.8 million civilians, excluding the Postal Workers (Source: http://www.bls.gov/oco/cg/cgs041.htm) . Add the Military and the US Postal Service and that figure easily jumps to over 2.5 million. The next top employers are McDonald’s and Walmart (neither of which offer the best earnings to employees). According to many, we want the government to regulate less, and let the private enterprise work its way through this. What we fail to see is that the private enterprise already found a way to make more money and reduce costs. They took our jobs overseas!!! I believe these times do need more government intervention.
It is time we stop the “greed” of the private enterprise and give more power to the people. American people need more, better paying, long lasting jobs in the working middle class. CEO’s and CFO’s salaries need to be realistically based on the earnings potential of the company, and bonuses based on performance. Sure, we probably can all agree on the statements listed on this paragraph, but do we really believe that this can be accomplished without big brother regulating and overseeing the course? I don’t.
The “stimulus package” seems to be designed to come into fruition about the time the next presidential election hits. It is a clever plan. If nothing else, he is a planner!
Oh, by the way. Someone said that the government is the largest employer in America. I believe it is actually the small business owners and they are closing their doors at a record pace.
Soon we could all be depending on our income from the government. Either with employment or welfare.
Ellie,
I agree with you on your point about how small business owners aren’t being helped much at all. What about big business? They get the handouts and the bailouts. As for small business, we get taxed (or threatened with more taxes), while employees — well, they just get laid off. The little people get the shaft. Unfortunately, life isn’t fair for the little folk or the average Joe.
what I’m seeing is the fact that it’s all about people who make quite a bit for a living. My husband is the only one who is working right now. He only brings in $21,000/year. We have 3 kids. Yes i hate to say it but we are on food stamps and state help for the kids’ insurance. But if i go and get a job there goes everything, and we will be in a deeper hole then anything else because then i will have to pay for someone else to watch my kids on top of it.
What i am asking is where is the help for us lower class people? Only people who buy a new house gets $8,000 and if we “go green” for our house that we have owned for 8 years we only get $1,500? Now i ask is that fair? I thought they were trying to keep people in their houses not kick them out & get them to buy new ones. i know i should go to college & graduate so that i can make more money but I want to stay at home with my kids & watch them grow up but i don’t want to lose my house in the process. No i don’t think that I deserve money for free but all these other people out there don’t either just because they make more then my husband does.
@Misty
Unfortunately, you are the root cause of the problem. You and your family live WELL beyond your means at the expense of those of us who work hard everyday. If your husband is the sole provider, making only $21K per year, how in the world can you possibly provide for 3 children and make a house payment? You can’t, which is why you rely on others to pay for things for you. You say that you don’t think you deserve money for free yet are willing to accept it. You want to have your cake and eat it too.
“I know I should go to college and graduate so that I can make more money but I want to stay at home with my kids and watch them grow up…” This is exactly the attitude that is prevalent in this country and the one that is our downfall. Rather than work towards something that WILL make you able to afford things in the future, you shrug them off because you simply don’t want to do them. There is nothing in the Constitution that says that you are entitled to economic fairness in this country. There are three things that you are guaranteed:
1. Life; the government will ensure that can live. That is it. This does not mean that you have a right to healthcare to prolong your life or take care of every time you think you have a cold.
2. Liberty; the government will ensure that you are free. You are free to make your own decisions and can vote in elections. This is now taking a big hit under Obama.
3. Pursuit of Happiness; John Locke’s original words were “Property” meaning that you have the right to own and possess things on your own. The government cannot come and take something that you have purchased outright. The Pursuit of Happiness is meant as the “American Dream.” You have the opportunity to get an education and put it to use to better yourself.
Finally, I would say that you do not deserve any stimulus what-so-ever. You already get subsidized food and child care; what more do you want? You fail to realize that the majority of people who earn “quite a bit for a living” do so because they have worked extremely hard to get to that point. Making them pay higher taxes to prop up your lifestyle will only serve as a disincentive to work hard. Why should I work hard, over 60-hour weeks, to have half of it taken from me and given to you when you readily admit that you do not want to work? Talk about fairness…
All through the Bush years we constantly heard the left criticizing him for increasing the national debt. Where is the criticism now?
Misty,
I sold my house in 1999 to a married couple with three children. I was told that both husband and wife worked at a local hospital and that each made around $21 grand. The couple had been saving to buy a house for years. I know couples who stagger their work hours so that one of them is working while the other is home taking care of the kids. True, you don’t have much time together as a complete family, but when you do, it means even more. BTW, they will live in that same house, and despite the housing slump, it is worth a whole lot more than they paid me for it.
Houses will slowly go back up in value when the Government stops interring with the market. Who is going to pay more to buy a house from someone when they can buy a new one for less? Making it easy for people to buy a house is NOT good for our country.
Has anyone looked at their taxes for 2009? I was just doing some rough figuring with my Federal with holdings and realized that with a reduction of my with holdings and the Fed tax table not changed instead of getting a small return I will be owing a ton of money to the IRS. There was no stimulus for my wife and I just a lot of smoke and mirrors from the Obama administration. If you have a low middle class income and have no dependents, I would check on how much you’re going to owe the IRS.
Yeah, I noticed the same thing Ed, I am in the same boat as you are. (Why should we have expected anything other than another deception?)
I voted for him and will stick by his plans. He needs to ease up on tax audits though. A lot of people are starting to hate his policies.