The money is just an advance on next year’s tax refund. So that answers the question of where the money is coming from. It’s more or less a cash advance and I won’t be surprised if everyone just pays more to the IRS in the end as an “convenience fee”
This is nothing more than an attempt by congress to make it look like it’s doing something under a lame duck President.
First George and Nancy got together and calculated $160 billion would be the right amount. Now, the Senate is trying to add more than $40 billion more. Where is this money coming from? Our country should have a bankruptcy sale. We do not have the money to provide these rebate checks after all of the money that was and is being spent in Afghanistan and Iraq. Also, let us go ahead and elect Hilary and let her implement healthcare for everyone. Next we should provide everyone that graduates from high school a check for a million dollars. Look at how that could stimulate our economy. an finally how did we ever get into the illegal alien problem that we now have? By not enforcing the laws that we have. Because for someone to be here illegally means that they do not have the right to be here.
Don’t we as a nation have an opportunity cost with our national wealth? In other words, shouldn’t we be weighing what this $150B could potentially be spent on, and then making the best choices? It appears to me that this collective wealth is being largely wasted, compared to some other options that would really serve our country, such as:
- investment in roads and bridges
- investment in schools
- investment in clean, indiginous energy sources
- how about a $3,500 savings bond to each American born for the next 10 YEARS !!!
So, taxes are due in April, then we get our own money back to spend in June?????
I’m not shopping at Walmart!!!!!!
I want my country back!!!!!
Note that when credit is cheap prices climb. It is a kind-of third-party payor system. Also, as currency inflates, your savings are worth less. Remember what has been happening to the Japanese economy.
Think of the tax rebate checks as a way
for the Federal Government to inflate the currency. How else would they manage to pour more money into the economy? Borrow it? Not.
The answer is no. Wall Street and big business may get a prick in the arm but the claims are only a daydream to save them. No one has yet looked at the consumer side of the economy and the debts they have incured. Credit card debt and loan sharking of the consumer is rampant and no efforts to control it. Consumers have for many years been relying on the abundance and freely available credit at many large retailers that are issuing these cards with high interest and fees. The fall of the home loans is only the beginning, the credit card industry will be the next big market to take a hit. With credit cards the consumers have spent all available income using them and is why they would not qualify to borrow on a home loan. To offset this lack consumers ability to save to buy, the mortage and home building industry is lending money on credit cards to pay for a downpayment on a home loan at loan sharking rates. Consumers need controls on issuing credit cards and interest on credit cards and controls on the ‘Paday lending’ businesses also issuing high interest and questionable loans that are ultimately sold to banks and other financial institutions as high risk loans with extorbant rates and fees. Instead of congress looking at saving Wall Street, it should be trying to save the consumers from these loan sharking practices. Help the consumer and it will save the economy, after all, the consumer is the economy. I don’t mean bail out consumers and pay their debts, they know their debts and responsibilities. The consumer just thought they were going to get a free ride and speculating right along with the financial industry. The banks largest profit is in the interest and fees on credit cards that at any moment in time adjusted to meet the needs of the financial industry, thus limiting the consumers ability to pay off any debts. On a $2000 credit card balance it can take up to 24 years to pay off at minimum payment rates, assuming no more additional charges. Then with several credit cards the consumers are caught in a life of indentured servitude trying to pay for what they have borrowed. It’s an old mining town trick to keep its workers in its debt and unable to get away from the vicious circle of its employer. Running an economy on debt is not a sound or solid economy nor is it a sound way to run Wall Street and our government. The value of the dollar on the world market has slowly devalued but it is hidden from the american people and has done more to cause inflation and higher prices on foreign made products. The very reason for american companies to outsource has been swalowed up in the dollar devaluation and we are back in the same boat, higher cost of living and higer prices for goods. The poor state of the economy is not just a matter of Wall Street and the housing market, it’s many things and the consumers high debt is not given much thought. Every phase of the economy is based on borrowed money and debt, even in government at every level, federal, state, and city. They all expect consumers to borrow money to spend money, pay as you go has been lost to the world of indebtedness and it is an ever increasing debt. The rebate if any, is not enough to cure the ills of the economy that is so varied and complex. For the american economy to recover it is going to take many years of hard line control of debt by the consumers. Living within the means of a family and its income with pay as you go spending is what it should be. Borrowing is a pit of dispair and fear for the consumers and they feel they have no way out of it. Business and wall street will survive only if consumers are some hope of getting out of debt. Stop advertising spending with credit cards, they are not legal tender nor authorized as legal tender. It is a trap and costly for consumers as 20-30% of the consumers after taxes income is lost in interest and fees on their credit card type debts. Banks and credit card companies are getting bolder and more forceful in their advertising to hook consumers, especially the younger generations, in to this cycle of defrauding by misrepresentatiion. They do not advertise the interest or fees they charge, they only advertise the ease at which you can indebt yourself.
The only problem with Walmart’s rollback is that it will cost more employees their paychecks when they drop hours to make up the difference in the money they lose on the rollback. As for MR. Bushes tax program? Way too little too late. The recession is already here.
No, but that doesn’t mean that the Fed and the Government won’t continue with their wishful thinking. As for the rebate, it’s going in my Roth IRA. There’s nothing in the stores that I “ABSOLUTELY” have to have. Fix the dividend tax, and stop with the deficit spending masquerading as “Stimulus”.
I think the Fed is like a doctor prescribing medicine for a virus..the virus will run its coarse no matter what..but if the doctor still obliges the fretted mother he can take the credit for the medication when the virus has ran its coarse inspite of the medication.
Clint
Denton,TX
I read thru the comments, and sense a lot of cynicism on the part of the writers. Justified, but still….
It may only be $600, but it’s better than nothing. I’ll be putting it into new eyeglasses, and car repairs. Urgently needed, but oh so not in my budget!! And I refuse to go into debt for these things.
It will be a tiny economic stimulus as it circulates from the mechanic to his supplier, etc. Will it make a huge difference in the overall scheme? No. But it will help make my life a bit easier.
The stock market will head down tomorrow about 30 minutes prior to the fed announcment. Nothing anyone can do (including this stimulus) will avoid the upcoming depression. People need to stop using the R-word and start using the D-word.
New money benefits those who get it first (the consumer), and then those who get it second (the banks). This is the intended order of the stimulus package. The assumption is that regular joe is responsible, and uses the cash to pay down debt, or puts the money in savings, either way it improves bank balance sheets by ten times the amount, and elliviates the lending crisis.
One thing consumers must not do is spend it at walmart which sends it 100% to china, this will dig us a deeper grave.
Too much faith in the regular Joe?
The rebate to stimulate consumer spending is foolish. Most of the money will end up going to retailers who pay low wages and are buying goods in China. Better to INVEST in our crumbling infrastructure rebuild the nation’s roads & bridges. Lots of jobs are created from construction workers to engineers. And are are major purchases of materials as well. We need to invest in the infrastructure sometime. As long as we are borrowing these $$ from our kids, we might as well leave them something for it.
Stimulus package? No it’s a band aid. My question is where did the lost money from default mortgages go. Where’s the money?
If you think Walmart is acting in the public interest, I have some canned Florida Sunshine I will sell real cheap. Half price, of course, its only to stimulate the economy !
All this talk of paying down CC debt. It would get paid down faster if the CC card companies/banks were not charging outragous interest rates. The CC companies/banks want everyone in debt,,thats why they keep expanding your limits withoout asking you. They push cash advances down our throats with everystatement,,then they talk about the coming defaults…DUH…
Put the 150 billion into our roads and bridges,,and tell every american who goes to casinos to go do something real with thier money, like buy some real needed stuff. The subprime mess is nothing compared to the coming credit card default crisis where the money is gone on junk or casinos. At least with a house default the house is still there for some recouping.
It may help the banks more than anything. I can say that my check will go directly toward money (Citibank Visa) that I have already spent.
Rebate CHECKS? in JUNE?
Somebody ’splain to me, why
Congress can’t pass legislation that simply orders all employers to cease payroll FIT withholding immediately up to $600 total (and until further notice? when the “stimulus effect is realized?) on all employees earning less than $50,000/year.
Almost immediately, those who need it most will have bigger paychecks to spend on all those consumer goodies.
This sounds like good old fashioned “Bread and Circuses” to me. The Roman Emperors did stuff like this throwing bread to the starving masses while holding games in the colliseum.
Today we’re being thrown $600 loaves and the circus is politics as usual in Washington.
Where’s the innovative ideas that we actually need like fixing healthcare, working on social security, fixing our nations crumbling infrastructure, changing the tax code to punish businesses that export their jobs, work on our immigration issues, etc. Instead we are stuck on fanfare and quick fixes.
Something tells me that we will eventually go the way the Romans went. Only we are the barbarians this time.
How are we going to be able to support these 12 million illegals that are living off our tax dollars. Free medical,education and no taxes dollars ever paid back into the economy. It is very simple It is called dollars in, dollars out. Fire all the politicans in Washington and replace them with real everyday people. The Clinton’s Obama’s and McCain’s are a disaster. They all keep saying that Washington is broken. Guess who has been in Washington for these last four years and beyond. What a joke. Wake up People.How much more can we take?
Wait a minute I’m trying to figure this whole thing out.We got into this mess how?Oh I see,cut the interest rates so low that one and all can participate in the American dream–and or nightmare as it is turning out.You really can’t afford this house?Yes you can(big wink).We can get you in there-Trust Me!!!We can get you all the credit you want and then some–let the good times roll.Credits my name and CREDITS the game,this thing will never end.Oh oh what happened—credit crunch,Subprime blues etc.But not to worry we have the solution which is to run the cycle all over again–lower the interest rates,tax rebates,refinance your mortages–TRUST US!!!So let the boon for borrowers and the blow to savers (that will teach you to be careful with your money!!!)to commence again.
If the Republican’s trickle down economics theory is correct then, money given to the factory trickles down to the workers. If the factories are outside this country then the money trickles down to their citizens not US citizens. That means the factories have to be in the US to be of value to our economy. It would seem we need new factories producing something of value. So, the question should be what can the government do to support factories/producers in this country? No one seems to be considering that yet. If you want to stimulate the economy why not spend money on creating things this country can produce and other countries can not? Maple sugar products? Jewelry from gems found mostly in this country? Artistic works rich people in other countries enjoy collecting? Movies? Educational research at Universities? What else? Any ideas?
I am completely amazed at the number of articles, news reports, speculations out there that accurately drive home the problem with the housing market. But not one has even come close to understanding what truly is happening nationwide. It is not the inflated prices of those few states of CA,NY,GA and FL it is not that loans were sold to people that couldn’t afford them. What is being overlooked is the majority of the states had very minor adjustments to their foreclosure rates until the hysteria was put out in regards to the other states with California leading the pack. Those ARM mortgages that were sold to customer in the last 3years and paid on time, were fully expected not to still be in a mortgage that adjusted but finally to qualify for a conventional product. But instead two things have happened one of which noone will touch. The credit bureau system runs amuck and we are determining people’s lives based on a number and then the reaction to the market put so many constraints that very few qualify for a mortgage now so that yes they are in foreclosure now that there ARM has adjusted. Until the credit bureau system is overhauled and people learn to underwrite with common sense expect this to get worse.
Now our brilliant senators want to extend unemployment benefits while some of the unemployed are hunkered down at their computers selling the stock market short waiting for their weekly “rebates”.
I’m sick of this kind of writing by irresponsible reporters by saying quote–
“To really get the economy back on track, what’s needed is an overhaul of the mortgage lending process in order to protect borrowers from overzealous banks pushing exotic loans that the borrowers really cannot afford.”
The mortgage industry has already been overhauled, by itself. Many of the irresponsible lenders have either lost milions or gone out of business completely. This is just jumping on the bandwagon of what is popular to say right now. It is actually hurting the economy tremendously that these banks have lost so much money, and it would help the consumer if the guidelines weren’t so stringent in qualifying for a new loan. Anyway, I just hate to hear people cry to the government to overregulate everytime there is a problem in the economy. Markets correct themselves over time, and we will have a period of growth after this “rough patch” is over.
What I don’t hear ANYONE mention is: “Where is the money going to come from?” We are already borrowing money to pay for the Bush War in Iraq. We simply don’t have the money. Are we going to print more (INFLATION here I come), or are we going to sell our farms to China?
Just imagine a “surge” of extra 150 billion dollars invested on public health and education… wouldn’t that add much more strength to this nation’s economy?
Does the fact that this is a election year influence this decision?
How much of these 150 billion will end BACK in China? 3/4?
I think talking heads like Paul LaMonica should just shut up. They dump on everything being tried and this just exacerbates the bad perceptions out there. Your idea of simply cleaning up the subprime lending mess is anything but simple and will take years to sort out. Paul – go take a class in macro-economics before you pontificate again.
My lord, our country is in bigger trouble than I thought it was if our citizens sit around and clap and cheer because our benevolent REPRESENTATIVES will throw us a $600 crumb!!! Yikes. Is there another country I can move to with less idiots than here? Like a man on tv said the other day: $600 is an ipod and a couple of tanks of gas.
These must be the same people that get all excited when the get a tax “refund” every year because they are too ignorant to understand that they are overpaying and lending money to the government interest free. But hey, the Gov’t game you money back!!! Idiots, it’s our money!!!!
It would make more sense to stop so many giveaway programs and make healthy adults with or without children work for a living. We waste more money and tax those that are working for a living to the point that we are struggling to make and living and try to educate our children. We need to get back to the scriptures “If you don’t work, you don’t eat. Let’s take care of our Senior citizens and let everyone elso work for a living. Stop giving away the farm.
No, it will not do any good at all. I can’t believe we have that many people in government that are so out of it. Let’s try stopping all earmarks and having all members of both Houses be unpaid volunteers.
I agree with your article, getting consumers to invest would be a better economic stimulus…however, try selling that plan to the Democrats who want to dole out more food stamps instead.
Anyone ever heard the saying, “Give a starving man a fish, you feed him for a day, teach the same man how to fish for himself, you feed him for a lifetime”? Seems to fit quite well in this situation. This ‘band-aid’ fix to our sinking economy is a joke. The only purpose this will serve…to allow us an even BIGGER deficit. Give me a break! Instead of worrying about how they are going to mail out hundreds of thousands of ‘rebate checks’, they should be worrying about coming up with a plan that will actually HELP our economy!
NO. However, entirely laying the blame on the mortgage industry for forcing people to sign up for exotic products is ludicrous. If there was no demand, there would have been no supply. Both the borrower and lender are culpable.
I agree the refunds will do little to stimulate the economy. I know anything I get depending on size will either pay down something (certainly not my house note!) and/or be invested to earn some additional value. As hard as it sounds bad practices with home lending being only one, lead to this mess and only cleansing or eliminating those practices will fix the economy. It will be tough, but the “piper needs to be paid” to get us back on a sound economic foundation. Besides, lending big money out to “buoy’ people or agencies only means something else takes a steeper cut or loss. With a country already borrowing from foreign concerns, and in a deep deficit, this tactic only spells trouble further down the road.
Increased consumption expenditure is a consequence of a healthy economy, not the cause…
The Walmart stimulus places the cart before the horse:- pushing against the harness and bridle:- pushing against a string!
Its a type of faulty thinking that commits a classic fallacy post hoc ergo propter hoc! as of this – hence because of this…
Remember Africa’s large international airports developed in the early 60’s and 70’s. The thinking being – as all large economies had large international airports – thus ‘if this poor impoverished country only had a large international airport’.
Such is the thinking!
…if only the US had large consumption!
The Wal-Mart stimulus package will do wonders for the Chinese economy, since that’s where the money from Wal-Mart shoppers winds up. It won’t help the US out, since Wal Mart does not sell anything made here.
No, Americans cannot spend their way out. Considering that everythings on the downturn, hold the check until after you file bankruptcy on your all you’ve lost since Bush’s dictatorship began. I’m surprised no one saw this coming. Was I the only one concerned a few years ago when NasDaq did an astronomical jump. I thought it would flounder with a month, but at least it held up this long
Now that the check is on the way I can finally make my mortgage payment!!! Wow, thanks for getting our economy back on track.
It’s funny you should ask this question in the first place. This kind of thinking is exactly what has gotten us into the situation our economy is currently in. For decades consumers have fought to keep up with the “Jonses’” only to spend themselves into a blackhole. The Piper is finally playing his song and we must cough up the cash.
There are great bargins out there for those who live within their means. I feel no pain for those that cannot live within the confines of their salaries. Part of being an adult is learning to say things like; “No” and “Let’s save for this”, or maybe “We just can’t afford this.”
Instant gratification has bit The Jonses’ and their neighbors in the butt. I’ve always been a thrifty rebel. Save for tomorrow and learn from today.
Just look at the number of sub-primes BEFORE and AFTER hardening of personal bankruptcy laws.
Lenders did a lot of lobby for this law in order to allow them to become LESS responsible when approving loans.
What the change did, was to reduce the amount of risk incurred by banks and push it on consumers.
AKA: Free to sub-prime and liar loans.
I don’t think we can buy our way out of the recession. The difference between the last time the rebates were given out and now is that the prices on goods have risen dramatically. Yes people will go out and spend their rebate but once that money is spent the price of gas, a gallon of milk, carton of eggs will still have not changed and still be a struggle for the same people that are having a issue today. I really don’t understand how giving people money so that they can go by a new playstation is going to fix the housing mess, or reduce inflation.
The economy is slowing down, and the government’s “solution” to this “problem” is naturally………to start printing more money.
Sounds about right to me.
(I was being sarcastic)
You have a marginal propensity to consume and a marginal propensity to save. That is, you can do two things with your money, spend it or save it. So, let’s say a portion of this stimulus package is spent. There is a common term known as a multiplier. The money will cycle a few times over. It goes to the retail store, to suppliers, to employees, who in turn spend more.
Now say it goes into savings or to reduce debt. The money goes to a bank and helps the bank with liquidity ratios. The improved ratios allows the bank to lend more. The increased lending can go to business to expand operations or to individuals to start business.
So, in sum, 150 billion has the posibility to go a long way.
people need to start thinking long term.Most people are so focused on the immidiate brush fire and living pay check to pay check but not willing to disipline themselves for there future.I think alot of the problems are stemming from a scociety in a whole,think about it we are never tought how to invest or make money so where do you learn it?It’s not taught in schools or churches or in most homes.WE are being lied to about old business models(go to school get a good education get a good job a pention work for 25 years and then retire confortably)in a new busness enviorment.That just does not work any more.Our government is doing the same thing by putting a bandiad over a compound fracture.Be realistic stop sending my hard earned money to lazy people and teach them the fundamentals of busness ownership so they earn there own paychecks and have lomg term economic growth.I know this will never happen becouse people are tought to be lazy and needy but i just had to put my two cents in.
Which is worse, the screwing we give ourselves or the screwing the rest of the world gives us? If we have all of this money to give away why do we not use it to rebuild our infastructure that is falling apart. Hire American companies to do the repairs with American workers and pay them a decent wage to do it with decent benefits. But make sure those companies don’t screw in the bidding process. Am I asking too much?
the key point to remember is that when “government” hands out money to one group of people, somewhere in time it comes at the expense of either the recipients of that “free money”, or one of their fellow americans.
And there could be unintended consequences. Consider my friend. He will not get a refund because of income. His cleaning lady will. He used to pay her $50 / week. Now he is cutting her back to $50 every TWO weeks. In 6 months, she will have $600 less income, just from him. Her other customers may decide the same.
When benefits are given to one group at the expense of another, where possible, the group that got cheated will find ways to even the score.
Usually it is the recipients of the handout that will pay the biggest price.
The Bush tax cuts and the Bush rebate
Are simply moving my money back into the hands of the oil companies. If gas prices were 2/3rds less we would not need a rebate.I wonder when too much
profits will be too much.
I am sick of this *^%%*. Why doesn’t the government just send the money to China and Mexico, that’s where walmart has sent all the manufactures and jobs. When are we going to quit shopping at walmart , start riding bikes instead of wasting gas, enforce our laws to protect the decent people ?? Is anybody listening? I don’t think so.
Let’s eliminate the social security tax when filing your income tax, drop the marriage tax, eliminate the death tax, stop the tax on unemployment insurance, and then we can start talking, about a real rebate program, for every american, if we can spent millions on a war, the about should not be a problem.
So what’s wrong with Wal Mart lowering prices by 30% on things I am gonna buy anyway? And the rebates are just a portion (albeit a big one) of the stimulous bill. There are tax breaks for business as well as higher limits on what freddy and Fanny can borrow allowing some buyer’s in high priced states to get mortgages. I am not getting anything from the government but I would have received $2000. Yes, I would have bought something with that. Maybe not all of it but I would have spent some. Can’t blame the govnmt for everything…can’t afford that new house or that car, or that boat? DON’T BUY IT.
One word NO!
I live in Los Angeles. Every year here the streets are getting worse and worse. Potholes everywhere. The city has no money to fix the problem, the feds don’t give CA what CA puts in to the system and Iraq is getting new roads and schools…hmmmmm perhaps if we hadn’t spent almost a trillion dollars in Iraq the country wouldn’t be in this mess in the first place. I doubt the taxes the contractors have paid offset the expense of the war.
I have no sympathy for banks, they make so much money off of mortgages. It is not a prudent business plan not to have loss and waste accounted for. If the total loss is 5% that is still a very good business revenue, many business have much higher rates of waste and bad debt write offs.
Wages, seriously people, how can you not be outraged. Far more dangerous than the loan programs is Executive pay. While it has grown exponentially has anyone elses? This has a huge impact on the economy. The rebates even prove this because it targets people who are in pay ranges that have not increased. Shame on Corporate America. If instead of having a sale Wal-Mart would pay their employees a living wage and provide health insurance two things could be possible, first it would not be the goliath that it is and secondly all the people they pay more would spend more and therefore stimulate the economy consistantly rather than a one-time shot in the arm from the Feds!
How can we spend out way out of a recession unless the stores have something on which we want to spend out money? OK, any rebate will come months from now if at all. But let’s say I want to help out my favorite big box store with a little recreational clothes shopping. So I go in and see racks of bikinis, short sleeved tops and other summer wear. It is snowing outside. If it warms up to rain, I’ll be glad. It will probably stay cold until those checks arrive in May or June. Maybe part of the blame for the retail slump is crazy planning on the part of the stores.
Many of your readers seem uninformed or unable to grasp that the government is different from individuals. Unlike individuals, governments can spend more than they have. Your readers need a refresher in Economics 101. They will then realize that in bad economic times it actually makes sense for the government to pay someone to dig a ditch and then pay someone else to fill it up even with money the government does not have (but can print or borrow). To not do so is to simply risk making a bad economy worse. That is how the Great Depression took place. If the people running the Government and the Fed at the time had understood economics a little better than your readers, they could have avoided the Great Depression. This is what the current fiscal stimulus is all about. Instead of saying inane things like “we cannot spend our way out of this”, your readers should be asking if a 1% stimulus is enough, or should we be considering something like 5% …
This Rebate band-aid is not going to help anyone. Let’s say I give $20 dollars to a homeless person; is that $20 dollars going to lift that person out of homelessness? I don’t think so. This rebate is not going to help the unemployed find another job either.
All this rebate will do is add to the US’ already gigantic deficit. What the government must do is find a way to reduce the cost of living in the US, such as health care costs.
NO!!!!! The benefit will be very,very,very small. Does that give you an idea of how small ?
Speaking of small, the window of opportunity – major/minor public works projects EVERYWHERE, are needed immediately !!!!!!!!!!!!!!!!!! I am so angry – we could potentially avoid an extremely debilitating downturn – you may call it whatever you want. The absolute best case scenario for an outcome at this point, would be some sort of a very mushy recession that that could conceivably be as short as two years.
Above all this use your connections to halt – stop !!!!!!!!!!!
WE WILL NOT PERMIT THE GOVERNMENT TO RAISE LOAN CAPS FOR FANNIE MAY AND FREDDIE MAC, ( GSE’s ) THEY HAVE 4.9 TRILLION BEBT WITH ONLY 3.25 PERCENT RESERVES. I CAN WELL IMAGINE WHAT THEIR BALANCE SHEET WOULD LOOK LIKE NOW, NOT TO MENTION WHAT IT WOULD LOOK LIKE 1, 2, 3 YEARS OUT. **** i will not be forced to pay future taxes on this private banking mess, CLEANUP !!!
Yes, that’s right, THE URGENCY OF NOW IS EVERYTHING. Do you understand what I am trying to desperately convey ???
Retailers are obviously struggling and everyone is brainstorming on how to drum up sales.
To help the economy, the gov’t needs to give breaks and incentives to businesses who will create US jobs to take advantage of the weakening dollar. All that’s left are CEO jobs and service sector jobs. Service sector jobs don’t pay well. CEO turnover rate is high and they’re all trying to take what they can get during the short time that they’re on.
Well I didn’t manage to read all the comments here but of what I read the overall concensus is that no matter what the government does it is not really going to stave off a recession. I for one will be banking anything I get from the government as I do every year with my tax refunds. I’m 46 and one of the fortunate few with a good job, an excellent pension plan, employer provided health coverage and actually enjoy my job. I have a 77 year old Mother who is single and living on social security and savings, note no pension in this equasion. I have to plan for the day that something should happen to me to make sure that she is taken care of, thus I’ll continue to build my savings at the expense of my current spending. One of the comments I read said that actually saving the money instead of spending it might be considered selfish and if that’s the case so be it, but I’m not going to spend myself in to debt to try and save the economy.
Granted the money will be nice to have but will do nothing for my real financial sistuation. Overall costs to live are climbing faster than my salary. We need more jobs for people that pay taxes to cut the national debt so our taxes can be reduced. OH, I forgot, politicians can never reduce the debt or taxes so just keep our jobs here for people that are authorized to work here.
Handing out refund checks is a great way to provide stimulus for the Chinese economy. Everybody will run to WalMart or other big box stores and spend their extra extra cash on products made in China or elsewhere.
While we could increase carefully (not pork) spending on projects that keep our infrastructure intact. This would create real paying jobs and probably dampen the effect of the housing bust on the job market. It also would create a mid term effect on the economy far more substantial than the short term effect of rebate checks.
Want a strong country, then put everyone that is in this country back to work. It is the working class of people who pay the taxes and spend the most of their money. Why can’t we have a 6 hour work day instead of 8 hours or 10 hours or 12 hours work days. It seems to me in the past few years that our goverments have let the big corporations and companys do as they please with imposing longer work days on their employees, why, this is so they make sure they have fewer employees that will receive benifits. If we only had to work 6 hour days this would make the larger companys employee more poeple thereforth putting more unemployed people back to work by having four 6 hour shifts, instead of three 8 hour or two 12 hour shifts. This would mount to a 30 hour work week. I know that some of us could not make a living on 30 hour work week, but think about it for a minute, everyone that is able to work including the non american citizens will have a chance to work and be taxed like everyone else, this will help us get out of the large dept that our country is in. We need to put a stop to the freeloaders. Also if you have problems making it on 30 hours a week, I am sure that there will be enough jobs that anyone that need more work, will be able to find it. We need the extra time for our children and ageing parents, I feel that if you and your spouse both work 30 hour weeks that you should be able to raise your family and have enough to go around, providing you don’t spend over your means.Our large manufacturing companys should be happy with making a profit, but instead they want to be able to perdict how much profit they will make, that is why they move to other countries, it is no longer good enough to just make a profit, and see our country do good, they are greedy and want it all for themselves, we as the working class citizens see it every day of our lives,if you read the papers or watch the news. And we see our jobs leaving this great country at an alarming rate, and I don’t see any goverment official doing a thing to stop it. I have listened to the politicans that are running for office saying that this country needs change, well we needed change years ago, why just now. I tell you why this is just another platform that they use to feed the citizens in this country a bunch of bull. They know that we need to hear this so we will go out to the voting stations and put them in office, so they can do nothing they said that they would do. They get forgetable when they win something that they really have no control over so why tell all this untruth things. Let’s get real for a change, if you do what you preach then our country would be a better off. I could go on and on about this but the tax rebates checks will help me and my family pay a bill or two, but I hope it don’t cause greater problems for the new adimstration in the comming years. Thanks for listening.
The tax rebate is akin to Marie Antionette’s infamous quote, “let them eat cake.” It solves absolutely nothing and only delays the inevitable slide into recession, if not more. It’s an insult to those smart enough to see past next week. And quite frankly, we deserve it. We’ve allow our government to treat us a mindless cattle, to be slaughtered at whim. We’ve allowed this mindset of “open trade borders,” this idea of economic utopia to infest our collective consciousness. We bought into the idea of the “global village,” and turned our backs on our economic principles that made this nation a superpower. Protectionism was the cornerstone of our country’s trade policy and we have flagrantly disregarded past lessons painfully learned by other nations that ignored these precepts (see fall of British Empire). When a country’s manufacturing base is systematically dismantled and placed in foreign hands and lands, it is akin to giving away a birthright. The idea of “free trade between nations” is ludicrous, since all nations are not equal and quite frankly, it is not our responsibility to turn another nation into an economic power. We had the most to lose in such an exchange and yet we marched, banners flying and flutes playing, to our present economic crisis, one that I believe is far more serious than most realise, with today’s issues only a portent of what is to come. We all wanted cheap prices, but failed to realise that without good paying jobs, nothing is cheap.
I don’t think handing people money will help the economy. You give people money they spend on things that they would not usually buy, like computers, cell phone for kids (better ones), cameras, and etc. I think helping the people enought so they learn how to use the money that is given to them in a better way. Like saving some of it for a rainy day and spending some of it, maybe a 70%/30%, savings being the biggest part. I also think that if the schools also showed the kids how the money works in this country we would not have the kind of problems we have. There are young adults that do not know how to write a check, invest and so on. With knowledge of this, it would be really a shot in the arm because the children would know what they were doing in life.
The current FED Chairman is a lackey for the administration and that means the once independent FED is no longer living up to its’ original design/mandate. The Secretary of Treasury is also a lackey that is so far over his head that we are being out gunned and out performed by a significant number of other countries. Anytime you have the FED and Treasury cowtowing to Wall Street, it sets us up for a repeat of the Carter years. Where is Volcker when we need him????
Hell, I can’t wait to get my 600 bucks. That will be at least a weeks worth of groceries and a couple of tanks of gas. That is, of course, if I don’t give it to a credit card company to pay down some of my debt. I’m sure Capital One will be able to do more good with it then I can. Or maybe all us us Americans who will be getting a check should pool our money and start buying up foriegn companies like they are doing to us now with all the bail-outs. Better yet, I think I’ll take the 600 dollars, if I ever do get it, spread it out on my bed, look at it and says, “May I have some please?”
As I nead through these comments and the comments on the previous survey, I notice that all four corners of the country and most states are represented. It seems that citizens have lost faith in our President and Congress to lead and make good decisions about the future of this great nation. They may be feeling that America is slipping away and that the future for us as a country is bleak..I can’t help feeling and wondering if this is how Washington and Adams and Jefferson and all the other founding father must have felt under their King Goerge. My great great grandfather was a flag carrier in the Revolutionary War and had passed the flag down through the family, which is now displayed in Trenton, New Jersey. I would hate to see this great country vanish because of greed and mismanagement on the part of our government and it’s people. concerned citizen, scottsdale, az.
I don’t believe the proposed tax rebates will prevent a recession, but I am also skeptical that tax rebates geared for “investment” will also work. If nobody has any money to buy new products, then the best investment plan in the world isn’t going to do any good.
I have always wondered whether there is a limit to the amount of good finance does for our economy. I understand that finance allows money to (theoretically) flow to good investments and businesses, but I wonder if too much money stays in the hands of the bankers. Perhaps if we all focused on making substantial contributions to our country rather than a high return on investment we’d be better off.
Unfortunately for our economy, I don’t believe that the stimulus plan will help for the long term but IT DOES provide SOME liquidity where families that need it can get it.
Not to jump party lines, but a proposal in last nights State of the Union to reduce taxes over the long term was a great step-up to see.
Something should be known. Walmart cutting prices is a postive action for their core demographic, that I applaud. Price inflation is EVERYWHERE, especially in consumable household goods. I don’t believe its fair to lay judgement on a corporation that has as large of an impact on the economy as Walmart does. I’m sure this will deeper dig regular Walmart patrons’ loyalty to the mega-corp, but GOOD FOR THEM. Maybe they’re being proactive in lowering prices before its pushed on them.
I fundamentally disagree with your comment that the only thing that will turn around the economy is repricing home loans. I think that is an extremely simplistic solution to a very complex problem. In fact, I believe its a media cop out.
Further regulating banks may be one step in the puzzle but you are forgetting the HUNDREDS of banks that didn’t originate (or…’push’ as you put it) teaser subprime exotic mortgages that are lumped into the blame by media and America and acted responsibly/conservatively during a fad. Yes the mortgages are a problem. Yes, the banks that originated these loans should be charged by a higher order to WORK WITH THEIR BORROWERS and get manageable terms but you can’t blame sum for acts of the few.
Are you forgetting the credit card companies of the world? How are they getting through these credit crunch accusations unscathed? Sure, people may be struggling with their mortgage, but I bet they’ll miss a credit card payment before they miss a mortgage payment. What happens then? They are assessed the default rate of 32%(ish), their minimums skyrocket, their credit score is severely impacted and they can’t get value-added credit products anymore…nor can they climb out of the sub-prime label. Here’s another issue…have you seen the inflated cost of tuition over the past 5 years? I started college in 2002 and when I graduated 4 years later, I paid MORE THAN DOUBLE that year than I did my first year. I got an advanced degree from a state institution and my student debt accounts for 15% of my monthly net income. How about that for a credit crunch?
This a very complex equation with SEVERAL components and I believe that it should ALL be pointed out.
There are TONS of other options that could stimulate the economy as well. How about a tax forgiveness to corporations that lower their prices to consumers thereby creating a wash to the company’s bottome line? How about grants or incentives to companies to increase wages? What about further employment incentives to corporations? How about personal tax deductions on sales tax for gasoline?
I appreciate the fact that you address the topics of the masses, however, instead of criticizing with limited data….why don’t we come together, get creative, write our congressmen and try to right this ship.
The problem in this country is not the lack of spending – it’s spending too much. The country is in debt, and the population is by and large in debt with no savings. The problem with debt is that it makes an assumption, and that assumption is that you will have the means in the future to pay it back. The problem is, little ripples in our economy are amplified because people start defaulting on loans, and the whole thing spirals.
Whether we like it or not, THE SOLUTION has to include spending less, paying down debt, and saving up. This will result in ROBUST growth, because it’s done with cash instead of with credit, which is what you want. It will also allow people to absorb bumps in the economy better, because they’ll have some financial bandwidth to weather those storms, and we won’t need the Fed to flood the economy with money by lowering interest rates which cheapen our dollar.
We as a country and as people have to bite the bullet now and pay down our debts, or the recession we’re talking about now won’t even compare to the one coming in the future.
What scares me is I think we are in a downward spiral and I’m not sure there is any easy way to stop it. I only see places like Wal-Mart growing their market share and sending more money over seas on cheaper products. Face it, the less people have to spend the more likely they are going to go out and buy the cheapest product on the market which is likely going to be made in another country.
I suppose eventually things would balance out and the other countries will grow and we will be considered cheap labor and become the new China. Not sure how long that would take but I can imagine that would be a very painful transitioning period.
Wow. I am learning so much reading this forum! How about Congress sit down and do the same? Can someone rationally explain this circular reasoning our leaders provide to get us out of our financial mess? First they make money cheap and easy to get with liar loans, Americans leverage against inflated and unrealized home values, get themselves into debt they can’t afford, start to lose their homes and trinkets, never produce and export anything of significance in relation to what we consume, cry foul and what do our fearless leaders do? – write us another check against our own future so we can go and spend more money, get in more debt and increase the overall national debt and ignore the monsters in the corner of Medicare & Social Security. Somebody rescue us from them!
If the consumers spend the rebates thats a good stimulus for the economy. But lets just say no one spends a dollar. Where will the money go? In the bank deposit. So in affect the government gave $150+ billiions to the banks. Banks are the one’s who are in most trouble and need a bail out. This is a round about way of doing that. Just my 2 cent worth ..
It’s always been hard for me to believe that spending more money, especially if it’s on things we don’t need or want and will just consume, could possibly help the economy. Investing might. And deficit government spending causes the dollar to get even weaker.
I’m saving any check they send me. It’s weird how that’s apparently the selfish thing to do.
What every one is forgetting is one major thing … almost everything is inported from outside the USA!!!! So whether you shop at Walmart, Kmart, Ace Hdwr, everything is made outside the USA. Realize the only way to fix things is to reward USA companies to keep jobs in USA. USA got hit with European Union where imposing a tarriff is illegal, but giving a subsidy in the country is OK
Giving people borrowed money to graze the aisle of the local Chinese outlet stores doesn’t help.
Discount retailers will benefit, temporarily, but better paying jobs is the key to putting money into the economy. Worker’s hardly make enough to provide the household necessities.
And, how do we pay off the added 150 billion in debt except through higher taxes, which exacerbate the problem?
A few month’s worth of gas for my unnecessarily big truck. Send the money to the oil company, maybe they will lower the price of gas and I will not have to pay more for groceries and everything else because of rising energy costs.
Like what you wrote, it’s more of a false sense that the Fed is doing “something” about our faltering economy. Will it benefit our economy as a whole? I would love for that to be true…but it’s a temporary boost of confidence and an even more temporary boost in economy.
The real threat is our own jobs. Like Joseph wrote, “quit shipping our jobs out”. That is the real threat – as real as it gets. If people can’t work, they can’t buy. If they can’t buy, our whole structure of economics crumples.
Not to mention the fact that our minimum wage is too low. And to go along with that, a lot of our blue collar jobs that do exist are given to illegals. Jobs are leaving the country and the ones we HAVE aren’t being taxed as citizens.
I have SUCH mixed feelings about this. I’m in financial difficulty due to health problems/bills. So in the short term, it will do me a little good, and I admit I’m glad to have it. In the long term, though, it won’t help me OR the economy. I’d LOVE to spend it on something to “stimulate the economy”. But sadly there are a lot of people out there that will use the money, like me, to keep from drowning one more month…. What I wish…do something about the criminal cost of health care, do something about gas prices (like developing our own energy sources) and get military spending down (like getting OUT of Iraq yesterday). We CANNOT be the world’s police. We don’t have the money and we don’t have the lives to waste! I love our country and I salute those who serve, so I don’t want any more of them dying for such stupidity.
Never judge a book by the critics notes alone.
This stimulus package may actually be designed to help prevent another World Depression!
The real goal may not be (as everyone assumes) to get the consumers back into the stores and spending money, it may actually be planned and assumed that people will use this money to pay down their overwhelming debt – whether past due bills, credit cards, or loans.
This will help reduce the HUGE upcoming losses these banks are going to take when they finally correct the books. Soon, the largest accounts these banks will be adding to is the uncollectable debt accounts.
Sorry, but the good ole USA does not have enough earning power anymore to repay of all this loaned money, and when this is finally realized by all – PANIC and an unprecedented worldwide depression will follow!
Hopefully people will take these measley government “assistance” checks and pay the banks directly on past due loans and credit card debt, and we may avoid the DEPRESSION that will result when these crooked banks finally adjust to reality.
When analyzing this government stimulus package and the strategy behind it – who would carry more weight – retail or international banking?
The confusion to me in the solution to head off recession is that many will welcome the rebates but will we ever decide do we want people to spend, spend, spend or save? Americans are usually criticized because they don’t save like so many other citizens in other countries and then in the next paragraph we are encouraged to spend. I don’t think there is anyone in any position in the economy who knows or understands what would be helpful suggestions on how to manage or spend our money. My god, look at the national debt.
I would hate to look at economists personal budgets to see how they handle their own money. And unfortunately I, as a little old lady of 74 and overwhelmed with debt have no answers either.
An economy that consumes is not an economy. It means we spend all the moeny we make. We need jobs not cheap stuff.
Ok look back and see how this has came about. Now that our president has made his last State of the Union message maybe somebody can get this turned around. One of the big issues has been oil prices, what a surprise! As many have said – WE are a lazy country looking for the easiest way to GET BY! We have too much and want to stand with our hand out. Rich keep getting richer and the poor keep getting poorer and the middle class try to keep their head above the water. I know there is someone smarter enough to correct this picture.
I don’t think so. Smart people will, pay down their debt, Seniors( I hope they get something) will finally have money to pay for their utilities, and pills for maybe two months. $600 or $500 are not enough to purchase big ticket items. only a down payment and the rest on credit cards. (Right) we just get into more debt. I would say only a few % will be able to purchase something they would like or need.(Repairs on cars, homes, etc.)
$600 does not go far these day’s!!!!!!
There are several thing that could be done. One, either void or rewrite the trade agreement. So many good manufacturing jobs that paid a real living wage have been shipped out of this country. Second, stop giving company tax credits for shipping white collar jobs out of this country as well. Give them tax credits for kepping those jobs here. The current incentive is backwards. With very little real manufacturing jobs left and a growing number of white collar jobs leaving the country as well, whats the average America to do. We all can’t be doctors, lawyers and accountants. Nor can most people that work for chains like Wal-mart make a real living wage.
No, this will not help the economy. The items people will spend on will be foreign made, and will add more dollars to those overseas companies, not to US companies.
What we need is a stimulus package like the building of the Hoover Dam. Now that was a way to generate real jobs, real wealth, and get something effective done for the country.
I do not think this “stimulus” will help the people who need it most, and will cause the national debt to rise. The result of this will be felt by the next generation. Shame on us.
No, the rebate checks will not save the economy.
What is needed is policies and tax reform that get this economy moving again!
The tax code should be reformed to eliminate taxes on savings interest and dividends. These investments are capital needed for future growth. We already paid once on our wages why pay taxes again!
Policies need to include worker retraining so that people can begin new careers whether they be vocational or professional.
Our economy is a mess because of bad policy and overtaxation.
We need to begin the process of identifying the problems and solutions for our economy before its too late. No more quick fixes that feed another crisis. We need long term solutions and we need them now!
My suggestion would be to remain within your means and spend on what you need and not on what you can afford(thru credit cards) is going to take us out of this situation.
Also we would need to develop our skills to get the jobs that are in market and become more competitive with rest of the world.
I’ve read most of the comments and they are all RIGHT! I like the Andy Griffith times, – Maybe one person we haven’t got enough input from is GOD. We have made some terrible choices to put ourselves here; from the executive level to the poor down trodded person. Who is going to turn us around to be a Great Nation again?
The biggest issue, as I see it, is that people don’t seem to be willing to “do without”. Gas prices go up, but people still want their SUVs. Food prices go up, but people still want their big screen TVs so they put it on a credit card. House prices skyrocket, but people can’t do without a new house so they give in to some weird 7%/22% 2/5 ARM that lets them buy a house…for 2 years.
Companies are also fueling the issue with their irrational need for double digit profit growth. Every company that is trying to raise their profits faster than the rate of inflation has to get the money from somewhere. So they raise prices, decrease quality, and refuse to increase salaries. After years and years of slowly draining money from consumers to fuel profit growth, they are shocked that the burble bursts and suddenly consumers have nothing left to spend. Wow. But wait, here’s a solution! We run commercials telling the U.S. people that if they can’t afford something, that’s OK, they can just use their credit cards. That will artificially increase profits…for a few years. Now U.S. corporations are trying to squeeze blood from the collective rocks of their customer base. But we have nothing left to give and we are in so much debt that it will be a decade before we have the necessary free cash flow to again fuel economic growth.
I’ll do with the proposed new rebate the same thing I do with my income tax return I get this spring, put it in the bank for emergencies. That’s the only time of year my husband and I have any extra income, so we use it to do necessary things, (house repairs, appliance replacement, etc.) Neither of us has had a raise in over three years. Both our companies say the economy is too bad to give raises. I wish all my utility companies felt the same way. We don’t have credit card debt thankfully, nor car payments. We only owe on our home, which is modest. I think it would help if our government really looked at what’s going on, live in the real world for a while. Then and only then will things get done in Washington. Invest in our children’s education, teach them early on about budgeting your money, investing. and while were at it, make the powers that be, take the same lessons.
Paul is so very right, you can’t spend your way out. Probably most people will spend this, and more, thus taking on more debt. Look what we could accomplish is we made this a $150 billion dollar personal debt reduction. What do I care about retail sales. Even at a nominal 1.5% credit card rate, you would SAVE $9.00 the first month, and EVERY month you have a balance of $600.00. Pretty good return on the money.
People like Paul R. La Monica make me sick.. I absolutely HATE George Bush as a President, but at LEAST he seems to be trying to help with the mess he is leaving us with. And Walmart.. I don’t care why they are lowering their prices.. if it is to really help the consumer or to fatten their own pockets. I don’t see other retailers doing the same on such a large scale. And I hate Walmart almost as much as I dispise George Bush. Paul R. La Monica, when I see you are actually trying to do something to help American’s with their bottom line in their checking account, then talk.. OK? Until then, I guess you can keep puttig down every plan you hear that at least is trying to make a difference.
So, the government will send us money that they don’t have. They borrow it.
I have a better idea, for all of those people who think we can do something about it, get out YOUR credit card and buy some thing that you don’t need. At least that way the debt will be yours and will not be an additional burden on our over spending government.
Fear not, because when you can’t pay the bills, the governemt will devise some scheme to lower your interest rates or encourage you to file bankruptcy and put the burden on the evil banks. They can eat it all in the name of rescuing the country. They are rich right.
I suspect that the money given to people will buy some cigarettes, liquor and a lap dance. Invest now in vice stocks. For me and my family we will take that money and put it into college saving accounts so our children can get an education and not have to sit and wait for the government to send out the next $600.00 check.
Nope, the only thing that will fix the problem from it’s root, is to change the laws about consumer debt, starting with how mortgages work.
The lending institution that helped fuel this mess need to be held accountable. For every foreclosure, that the institution has on their books, they should be required to pay for family’s financial counseling. So the government needs to look at how to bail out the shaddy lenders, but the price for the help is required financial support of the financial counseling. Next step, the credit card companies need to anti-up money to help pay for the counseling. They are also at fault for the foreclosures and famililes living beyond their income. Because the bail out and tax rebate is only a band aid, if we don’t fix the real problem – family’s over spending we will be right back in this same mess in about 5 years.
I am concerned that this will be a particularly nasty recession on Main Street. I believe that in some areas of the country, people will be using the “D-word,” not the “R-word.”
Since the national savings rate is zero, people do not have any more money to spend. As has been pointed out many times, tapping equity was the source of extra spending money. Now that has dried up. While dropping interest rates to absurdly low levels has helped the banks and boosted stocks in the short term, the resulting inflation in commodities and energy costs is hurting consumers and companies alike (anyone remember 1970?). Just today, CNN reported that Dow Chemical saw a “$1.7 billion rise in materials and energy costs, the largest year-over-year increase in the company’s history.”
On top of food and energy, if you haven’t noticed, drugs and health care have continued to increase well in excess of the CPI.
That leaves credit cards as the sole remaining source of funds for most people. Watch the monthly Fed report on revolving credit for a preview of coming attractions – I believe there will be massive credit card defaults over the next two years.
The tax rebates are really welfare checks, since folks with extra kids, who paid less taxes as a result, are getting the biggest checks. As the article mentions, only a small part of the money is likely to be spent on items that help the economy. How much do we manufacture any more in the U.S.? As another CNN article points out, China wins either way if the U.S. enters a recession, since they make really cheap goods. And how much of the money that people in the service industry is spent in the U.S., vs. sent back to their families overseas (this applies to both legal and illegals working in the U.S.)
So the answer is “No.” There is no more money to spend even at the current level of employment. As the recession takes hold, further cutbacks in spending will occur, with people buying only the necessities. Service, finance, and our remaining manufacturing employment will drop precipitously. And U.S. trading partners, particularly Canada, but even China, will eventually see significant GDP decreases.
And so it will go …
The only way that I think we can partially mitigate this rather gloomy future is a national investment in infrastructure and energy independence, not gutting the dollar to aid in the export of agricultural products. But that will take a long time and realization that we are in a heap of trouble. So hang on.
As I mentioned on the Jim Bohanen show last week , we need a tax cut for people to open the small factories back up like the ones that are closed down in the south and everywhere else, the shirt factories and the shoe factories and sock factories and lwan mower makers, instead of shipping jobs and money over seas a tax cut for the employers in manufacturing,( not the Mc Donald and AppleBees)will increase employment, cut back in fuel use, and pay back the government in payroll taxes, this or something similar is needed to boost the economy not a check to go shopping at wal mart or anywhere else for that matter, we are already dying of consumption in more ways than i can count, you can read more at my blog, tombstone001.blogspot.com
I don’t think the rebate will help at all, but we sure will use it. Half of our rebate check will go toward credit cards used to pay for groceries and gas a few times this past six months. The other half will be used to pay for groceries and gas during the month or so after we get it. We won’t be buying any big ticket items with it. It will only be spent on necessities.
Absolutely! It will work to the same degree that Congress keeps all ‘ear marks’ and pork barrel out of all future spending bills
We are nation of borrowers and spenders and have been lead to this by our government, credit card and mortgage companies.
A recession might not be so bad because, God forbid, it may make us save a little money!
We need despertly to become again a nation who save and produces. China doesn’t seem to have a problem with saving and producing.
I can’t wait to put my tax rebate check into my savings account!
The ugly truth behind most of the comments here is that the U.S. economy isn’t the world-beating powerhouse it was in the second half of the last century. Both world wars transferred massive amounts of the accumulated wealth of the major powers (England, France, the Dutch) to U.S. private industry in exchange for war goods. All of Europe and Asia suffered massive damage and loss of life while the U.S. invested in infrastructure and manufacturing growth while suffering far fewer losses. At the end of WW2 the U.S. government, in an effort to avoid the massive civilian unemployment problem that military demobilization would cause, provided government funds for post-secondary education for returning GIs. The resulting highly educated work force coupled with the modern massive infrastructure and manufacturing base set the stage the sustained economic boom that established the U.S. as the world’s economic superpower.
The rest of the world took notice and now, some 50 years later, they have recovered from the effects of the world wars, invested in educating their populations, modernized their economic and political structures, etc. To be sure some have taken short-cuts (e.g. China’s industrial pollution levels) but they all want what we have (or increasing had) and are willing to settle for a better standard of living that is still well below that of the U.S.
In a free (and even fair) world market, the U.S. standard of living must decline to match what other countries are willing to settle for as they compete with the U.S. The massive U.S. amounts of consumer and government debits are all an attempt to collectively continue a standard of living that the U.S. can no longer support. The disappearance of the middle class reflects the inability of the U.S. to create and sustain sufficient economic advantage to support a higher standard of living for all but a small percentage of the population. Our collective inability to fix Social Security, medical costs, the federal debt, our decaying infrastructure and failing education system are all battles over dividing up a shrinking pie.
A few hundred dollars will buy at most a few more months of bread and circuses that may distract the voters until after the November elections. It will do nothing to address the years of “fat, dumb, and happy” that set the U.S. on the current course. Real solutions will take massive amounts of domestic investment in world-class education for all Americans, rebuilding our infrastructure, redistribution of wealth, and shared economic hardship on the order of the Great Depression.
Only a global disaster (world economic collapse, WW3, or global climate change) can move the U.S. to action on this scale.
Let’s face the facts the average household will spend the $600.00 they get on gasoline, pizza, and beer, and at the end of 2 weeks they will be no better off and neither will our economy.
The Federal Gov. has set the example for us, spend what aint got as if you do have it, and that is all this plan really is. Where are we getting the $150 billion to do this program when the budget is already opperating in a defecit? Just like the rest of us the government is going to use their big buy it now credit card, and we will end trying to pay it off in oh say 10 years or so.
This plan will accomplish very little in the long term.
I’m not sure how stimulated the economy will get. The friends that I have checked with will be doing the same thing as I plan. Namely to pay bills. In my case it will be a credit card bill.
Want to make a real difference? Tax the heck out of gasoline. That will cause a great deal of innovation to happen.
Want to make another difference? Take all the war money away from the military and ‘pay down’ our debt.
Americans need to support Americans, by buying American made. Unfortunately most of the junk that Americans think they need is imported. To get this country’s economy moving again is to buy from and support your local small business person. Americans must be willing to pay more for American made. It’s crazy to think that consuming imported junk will save us. Freedom is not free.
I don’t qualify for a check so I guess I won’t be helping to spend us out of a recession. I do, however qualify for the AMT so I guess I will be indirectly contributing (involuntarily of course) to this effort. I can’t express just how patriotic it makes me feel to know that my earnings, confiscated by the Alternative Minimum Tax, are finally going to do some real good.
We have a serious problem. Part of it is people living beyond their means and using credit to supplement their income. This is artificially adding to the inflation problem because people don’t really have more money to spend they are just using their credit lines to get what they want. The two options I see here are people can start living within their means and prices can deflate down to a point where people can afford to buy stuff on what they make or everyone can get a big wage increase to match where inflation is taking us. With the economy the way it is I don’t see employers raising those paychecks up so I think we’re more likely to see the economy correct itself with deflation.
Of course then there is the whole other issue with us exporting jobs overseas. We’ve gotten lazy. We need to try harder. Part of me hopes things will get bad enough that we pull together as a nation and realize we can’t keep going on like this and work together to build a better nation. We really do need to be investing in education. We need people with new ideas and people who know how to build those ideas. Those ideas are what create jobs and give us things to export.
There are several problems and nothing is going to get fixed overnight but I don’t necessarily view an economic correction as a completely bad thing. It’ll hurt yes, but I think it’ll pave the way for a better future.
How are “overzealous banks pushing exotice Loans” different from all the other commercials out there for cell phones, cars, electronics and other goddies we all would love to have. People have choices in life, that is the beauty of this country, too many people made too many bad choices to buy too many house they could not afford.
PLEASE!!!! Anyone who thinks we can spend our way out is out of there minds. If the government wants to give me back some cash so be it.
This has been a long time coming, we have gotten rid of all the manufacturing jobs (our back bone if you will) that made this nation great and sent them elswhere. There is nothing left to prop us up.
What happened? We used to set the pace for the world and were proud of it. Everyone else does it better now, Hmmmmmm.
To those pointing to one group or another as “the” culprit: It is no one group – everybody has been brainwashed into being ultra materialistic, greedy, and having to keep up with their neighbors. This has of course had the desired effect of everybody ignoring all risk and concentrating on the reward without any thought to the affects on other individuals or our society as a whole.
As far as a fix for this “crisis”, I’m sure our government will find some way to keep the indentured servants (us) in line and enrich the top 1% a bit more. Once they have done that, they will declare victory and adjust the statistics to match this new reality. After all, I, as a middle class worker have enjoyed a period of prosperity these past 7 years, right? (as long as you remove the costs of health care, taxes, food, energy, shelter, etc – because in the current “reality” none of us have to pay these costs)
Most of the stuff we buy today is made in China. Plus we’ll be borrowing that $150 billion from China as well. Whose economy will it really boost?
Why not declare a moratorium on federal income taxes for 2 months. Starting March 1…instant jolt to wallet
Everyone should realize what caused the problem in the first place.Over the past several years Energy costs have been rising. Energy costs have been going up at a rate not concurrent with the wages and benefits of the workers. It was inevitable that a recession would occur with that formula going on. All the rebates are going to accomplish is fill the pockets of the Energy companies. The cost of energy affects everything. When you look at how products are produced to how they get to the consumer. Reel in energy costs and you control the economy. People only have so many dollars to spend and they’ll spend it at the pump and to keep comfortable in their homes. Many products are also petroleum based and their costs must be paid for by the consumer. Why did our “Leaders” not learn from Energy shortages that previously occured in the past.
Just a Bush tactic to shift the attention off his $2 billion dollar a week war while at the same time raise his record deficit spending even more.
Instant gratification, that is what is wrong with real estate, it isn’t the fault of the bank, realtor, mortgage broker, it is your fault for probably borrowing more than you could afford. Most people below the age of 40 save nothing and borrow all they possibly can, it had to blow up sometime.
Since when did the “American Dream” become being up to your eyeballs in debt. That is not why our ancestors wanted. That is not what our founding fathers wanted. Someone who is living the “American Dream” is someone who OWNS the things he has. Save your money,and buy what you NEED. Then once your needs are covered, save and buy what you WANT. My wife and I have NO credit card debt. We have been in credit troubles before, in fact, twice before, but we learned our lesson. We owe on our house (which is not extravagant and costs us 900 dollars a month), and we owe on our car. We are working to pay it off first so then we can focus on paying off the house. The “American Dream” is to not be subject to things that are out of your control. If you OWN the things you have, you are FREE!
I have to say I think the leaders of our country are blowing smoke trying to cover up the fact that they saw this coming a few years ago but instead of stepping in then they waited to long and now look where we are. Seriously what do they think this $600 is going to do? And what gives them the right to be prejudicial about who gets it and who doesn’t? Not only that but they want to take from one and give to the other. Instead of handing people money who obviously can’t handle a budget in the first place or who weren’t educated enough between the different loan types when they purchased their house and are about to be foreclosed on why not figure out how to help them out in another way? Handing someone $600 who is about to be foreclosed on what’s this going to do? Instead come up with a plan to help them refinance into a 30yr fixed rate mortgage….If they can’t do that instead of foreclosing give incentives to companies that will purchase these houses before the foreclosure happens so that the homeowner’s credit is not ruined and let them rent the home possibly with the option to buy. This #1 stops a foreclosure, #2 gives an incentive to the investor which is stimulating the economy by keeping the value of the houses in the community at a level instead of the market steadily decreasing #3 allows the homeowner a way out without tarnishing thier credit to the point that it takes years to repair so that possibly in a few years they may be able to purchase again, #4 it keeps them in their home if the company allows them to rent so no one is really losing any money per se and finally if they have the option to buy the house back eventually it is stimulating the economic growth over time as it should be and not with just a quick fix.
I mean seriously they need to look at the long term no matter how much it hurts now instead of just putting a band aid on this. Liars always figure and Figures never lie and I truly believe that someone on the hill thinks they are pulling the wool over our eyes but the figures are shining through.
We as a people need to put people in office that are going to work for the people.
1. Everyone deserves an education because without it and with the rising costs of education beyond high school we can only look forward to more economic problems as less and less people are qualified to do the job.
2. If they are here illegally send them away until they can come back legally and pay the taxes. We are paying for and giving aid to people who aren’t paying taxes and totally ignoring the people who are citizens who deserver and need our help.
I could go on and on but I’ll get off my soap box thank you for listening.
This economic stimulus “plan” is a huge mistake — of course, it’s also just the sort of non-solution I’ve come to expect from the government.
Americans are already suffering from terminal Affluenza, where we buy all sorts of stuff we don’t need and really aren’t useful. We don’t need to buy more stuff.
What we need is governmental policy that will keep real jobs in this country. What’s happened to our manufacturing base since the passage of NAFTA is downright criminal, considering the kickbacks that corporations have received from it and the absolute selling-out of the American people by our “elected” officials.
However, the bleed-out of jobs in the US doesn’t stop with manufacturing jobs. For example, why is it that it’s becoming more and more common for medical labs to send your specimens over to India for the actual analysis work? Don’t tell me — nobody in this country wants to be a medical technician anymore.
Or take my own industry, IT. If you aren’t in IT, perhaps you aren’t aware of how many IT jobs have flowed out of this country. And it’s not because there aren’t people here to do the work. I’ve worked at three companies and seen the same scenario at all three — layoff Americans and hire Indians in order to cut costs.
I’m one of the “lucky” ones — I’ve found another IT job eventually after being laid off. However, a lot of Americans never recover financially from that layoff or go on to find a similar-type job.
And retrain me? I went to college and got a masters degree in this field so I could be competitive, I’m still paying the student loans for it. If I wanted to switch careers, I would. It’s no solution for the government to decide for me that IT is not a viable career for me.
And this economic stimulus plan isn’t a solution either. Personally, if I get a check it’ll go straight to my student loan. However, we’re going to be borrowing from China to make this stimulus plan happen, and that just doesn’t set well with me at all.
“Rosenberg noted that the retailers that seemed to get the biggest benefit from the rebates in 2001 were book stores, restaurants, drug stores and toy sellers. People also spent more on lotteries. (You’ve got to be in it to win it!) Meanwhile, consumers did not spend significantly more on bigger ticket items such as autos, furniture and appliances.”
I fail to see the point of the data and argument posed by Mr. Rosenberg. First, define “modestly.” Second, if we were given a check for $20,000 we could buy a US made car. Of course, for $18,000 we could by a nice Korean made car. But nevertheless, if we get $100 or $300, or, $600, you bet we will spend it on our perscription drugs (because health care is unafordable), or perhaps books (there is nothing wrong with reading, no child left behind cured all of that and now we cannot wait for the next intellectual block buster about children, wizzards, and the sort. Who can complain about lottery tickets when most of the money goes to fund public schools or some other state agency in most States. Toys, well toys for the middle class may be something from Toys R Us, I guess two wrongs don’t make a right when a tax break goes to the upper tax bracket or business (private single business owner)when they buy a 60 foot yacht made in Tiawan or Sweeden. Restaurants, well a cheeseburger vs caviar…you get my point.
So its nice that the middle class gets something for once. I don’t accept that tax breaks for the upper class or business goes to new business, employees, or the sort. Frankly you can’t change the desire itself to always minimize your expense and a new BMW for that single business owner is what results. The glorified belief that all tax breaks are rationally spent buy the upper class is a fairy tale arguement to sell it to the public. This time, the middle class is getting its break. So I won’t tell you what you should spend it on, don’t tell me what I should spend it on.
A reduction in federal taxes on gasoline and diesel would put money in our pockets now and all thru the next quarters. And would not cost all the money that printing rebates is going to cost. I am against rebates because of that cost.
Giving people money to spend is ridiculous. It will increase retail store sales, but so what. What we buy will have been manufactured in China. We manufacture very few items in the US. We probably have the largest per capita TV ownership, but not one TV is made in the US. Unless you are buying a Boeing 7XX or a cruise missile we are hard put to buy anything made in the USA. $600 won’t buy either. It will buy clothes and widgets made in China and that is about it.
Our government should have thrown $150,000,000,000 into energy programs to reduce energy consumption with such programs as requiring solar panels and energy saving windows and insulation on all new homes. Further require that all materials so used be manufactured in the US.
Alternately, make at least some attempt to stem the flow of 1,000,000 people a year from entering and staying in our country illegally. The current policy is to turn a blind eye to the invasion. Why? It is good for business to have more customers and keeps labor costs low. They are destroying our culture and infrastructure and are killing the average American financially. There are 40,000,000 illegal immigrants and their children in this country. Supporting them is obscenely expensive. The biggest crop that they harvest is the grass around your house.
Cash out refinance amounted to 300 Billion dollars a year into the US economy from 2001 until this year. Also note recent GAO study that the foreclosure/default situation is overwhelmingly due to deflation of values – which left borrowers owing more that home could be sold for. Largely, if the homeowner felt they had value and potential growth they would find a way to make their payments.
I went through this same situation in the early 80’s recession – having bought a home for $50,000 at 14% interest (FHA) – only to find it deflated to $35,000 the following year. BUT – 10 years later it was worth $150,000. It is truly unfortunate that there is no voice of reason, reassurance or intelligence in the mass media at this time – its just a herd mentality of panic stricken cows.
I have been in real estate and lending for 20 years and yes, there were significant abuses in the subprime arena, largely through brokers. However, those lenders/investors were compensated in risk based points and fees – its unfortunate that their woes bled over into the conventional markets. But this too shall pass – its a great time to buy!
No, but there are those in this country who think it will and, unfortunately, they’ll probably carry the day in the next presidential election.
I think it’s genius on Wal Mart’s part…lowering prices on stuff we are gonna buy anyway is great news. And by the way author, Wal mart is not going to fix the mortgage mess so why even mention them in the same breath?
I originally paid the taxes under the assumption that they would be used by our gov’t to support our infrastructure. Use it!!! Throw the money at the schools to give children knowledge, not just insight on how to pass the stupid standardized test. Teach them to be smart enough to use money, not spend it. Teach them how to stay out of these financial messes to begin with. Teach them to read the small print on loan applications and what it all means. Stop building on anything other than a solid foundation.
A rebate is a reasonable thing to do because it will inject a little money into the economy, and maybe keep a few more people employed. But obviously it won’t fix anything long term, and actually may harm things long term because it increases the debt load. For that you need sound economic planning and an end to the unbelievably wasteful military spending that is going on. That money needs to be spend on productive things – infrastructure improvements, research and education, or returned to the taxpayers in the form of reduced taxes.
Like giving Crack to an addict. Sure will get them high,….for awhile. People need to start to take some responsibility for there actions & stop behaving like children. I guess I should have taken a loan out that I could not ever afford, while artificially driving real estate to inflated heights. Maybe then I could have the people that have been honestly saving there money (doing the right thing the right way, the American Tax Payer that is) bail me out when my speculation & greed becomes evident! I mean this is Insane. Time for some people to feel some pain! Maybe then they will remember how they got into the mess that they themselves signed for,….as an adult…on the dotted line!
The rebate will have a short term fix on the economy. Really, what should be done is the greedy Mortgage Lenders
should be regulated as they have given out Mortgages with “no Money down” that people cannot afford. They deserve to lose money for these bad Loans. If you want to fix the U.S. economy how about reasonable trade policies that do not give away U.S. manufacturing jobs to other countries.
Bush has not figured this out, but the Govt will retrain you if you lose a job. Great!(from Bush’s State of the Union Speech).
Most of the money will go into gas tanks or be used to pay “in arrears” heating bills. This will not get the economy moving at all. We can not spend our way back into a good economy without reducing the deficit.
Instead of an “economic stimulus plan” this could just as well be called a “politician re-election plan” because that is all it will end up doing. It’s a win-win for the politicians. If the plan works, they can say “We got together and solved the problem; so vote for me in November.” And if it doesn’t work and the economy slides into recession they can say “Well, the economy needed a stimulus so we moved quickly and acted appropriately. We did what we thought was necessary and put some extra money in your pocket; so vote for me in November.” Either way the politicians win (spending our money and looking good while doing it) and the taxpayers lose (the economy will recess and there will be $150 billion less in the nation’s coffers).
This tax rebate is a joke. I believe most people will spend it on things they are already spending it on, monthly expenses, not products, because of higher prices on energy and food. I won’t get the tax rebate at all because of exceeding the income cap. I would have spent it on something. They’ve cut out the one segment of people who would have actually put the money back into the economy. I would have bought new furntiure and new LCD flat screen for my second home condo, but not now. Screw all them idiots in congress.
I don’t think anyone get’s it! Big business doesn’t want to pay decent middle class wages any more, and they love sending those jobs overseas where they they get more bang for their buck. It takes 0ne single income in any household to be making at least 60 to 80 thousand per year to be in the middle class. When was the last time anyone saw those kinds of jobs in vast quantities in this country. They’re drying up, and that’s what’s wrong with this economy. We can’t all work at Wal-Mart or Lowes or Home Depot and make those kinds of saleries.
I think the rebates will help the economy, but not enough to notice. I plan on spending mine on finishing my bonus room or a new kitchen table. The problem resides in giving individuals loans they can not afford. It is not just the banks fault, the consumer is also at fault. Get rid of the adjustable rate mortgages and the high credit card limits. Limit consumers to one or two credit cards. This will cut down on over spending and make people adjust to what they can afford.
I don’t think the rebates will hurt. If it goes through I know it would help me and my family. $600 bucks isn’t much, but its a lot better then no rebate at all.
“This is only a sedative, not a stimulus.” This is a quote from fellow radio talk show host Herman Cain. I have to agree.
America outsourced manufacturing to China and few more services to other countries like India, Philippines, Mexico. Most of the productivity here is in terms of services provided locally. Over a time, this model does not work and future Americans will go into more and more debt. America should focus on exporting these services to other countries too to reduce the trade gap and create wealth for the country and stop the useless war in Iraq.
The real truth is that the media creating all this hype about a recession is what is keeping people from spending. They are creating scare and they can end it. The real reason we are where we are right now has to due with corporate greed and the government letting business give loans to people the know can not afford it. Its time to set strict rules and not allow sub-prime mortgages and stop pre-approving individuals for homes they can not afford. We also can not buy more when we are paying $3 or more for gas and over $5 for a gallon of milk. Ask the oil companies and big business and CEOs to give up some of their millions of dollars in bonuses and offer cheaper prices for consumers. Then we can actually spend money on more than gas and milk.
No, it will do jack. One thing I do know is…
The gov’t has to cut back on spending. I wish the Federal gov’t like Mich and many states were required by law to balance their budget. The fed debt created by deficit spending is mortgaging our future and our childrens future. Entitlement programs like social security and the new medicare prescription drug plan are responsible for the escalating deficit. Merely because something like the Medicare prescription drug plan has a beneficial effect by helping people with their medical expenses does not mean it should be implemented. The criteria should not be whether a program does good. The criteria should be can the country afford it. That’s how individuals have to manage their personal finances and the same should apply to the nation.
Our parents generation should not be getting higher social security benefits. I am afraid the excesses of our parents generation will bankrupt our generation and our children. In voting for elected officials, other than national security, which obviously requires strong armed forces, your number one concern should be fiscal integrity. This might occasionally require raising taxes if it will help eliminate this nations crushing deficit. Responsible economists are predicting that at the rate we are going the nation will only be able to pay the interest on the national debt by 2040. Our country and its corporations are becoming more and more indebted to the middle east and China as they buy more and more of our bonds. We are becoming a debtor country. The countries that hold our debt will gain more and more inflluence and power over us. I don’t mean to be depressing but drastic action is required.
We must require that elected officials be fiscally responsible. And realize occasionally this might require a tax increase , not to spend more but to eliminate debt. Push for the elimination of the medicare prescription drug plan, which is horifically expensive. Demand a federal law requiring a balanced budget. Demand an end to pork barrel spending where politicians seek favor with their constituents by bringing unnecessary and wasteful projects to their district through the use of earmarks . This porkbarrel spending results in things like a 250 million dollar bridge in Alaska which connects a desolate area with the mainland. People should be outraged by this even if it benefits their area.
Our generation must get much more active and vocal in politics. Politicians think of the next election, but statesmen think of the next generation. We need more statesman.
I agree with the comments about educating the public on financial responsibility. While we are teaching our youth lessons about history and English, can’t we educate them on how to properly manage their finances. We won’t get ourselves out of trouble until the American public learns to save for hard times.
Give them the money and they WILL spend it. Hey, it’s better than nothing. At least someone is trying to do something besides sit around and play the blame game.
The press, pundits, and politicians all act as if the slowing of the economy is the apocalypse. Look at history cycles. It is necessary for the health of the state. Is it pleasant, no. Is it bad for politicians during an election year, yes. But throwing government money at bailouts and boosts will not help a situation. It will only make us more of a welfare state.
I think it is very telling that the first comment is “If I didn’t have to spend $700 for health insurance…” Assuming, of course, that someone ELSE will be paying for her health insurance under universal health care. I guess that means once we have universal health care, I will no longer be able to boost the sagging economy. The entitlement attitude is going to take us down.
We have dug ourselves financial holes as a result of our lack of control, our sense of entitlement and continually escalating prices. When we get that $600 we’ll just hand it over to the banks (credit card & car payments) and the oil companies (gas for SUVs and heating 3BR houses). How will that stimulate anything but their already enormous profits?
I refuse to believe that the politicians don’t realize this.
There is only one thing destroying America and it can be spelled in two letters–ME. From hyperconsumerism to supplicants demands for more government entitlements, Americans have lost their way. We’ve consumed our nation into an unsustainable trade deficit and housing prices that are still too high for our children to afford on an average income. Narcissisim has replaced individual responsiblity and sel-reliance.
Spending will not get this country out of the predicament that it is in. Savings will. But the idea of Americans saving money and living within their means makes the government, wall street and the credit industry cringe. These institutions thrive on debt. Are any of these institutions, for example, touting lower home prices as a good thing?… a better affordability index… lower monthly mortgage payments… no they are not. They want people to be deep in debt while spending their equity. For all of my working life, I never lived above my means and I didn’t care about keeping up with the Joneses. I saved my money and now, at 50, I own my own home, have money in the bank and see my retirement future as bright.
$600 will do nothing for most people, nor will it do much to our economy. You want to “boost” the economy and consumer optimism? Stop providing free health care and education to illegals, and put a 20% tax on all money wired to Mexico, then watch what happens…
I love how banks have become the guilty party for the current credit crisis. Let’s not forget that many of the mortage companies that made these subprime loans were relying on brokers to gather the information from consumers. If the broker lied on the application there is no way the bank would have known. The real problem is broker’s are compensated based on how big the loan is and how many loans they sell. That’s what got us into the problem in the first place. That and the fact that there seems to be a lack of general financial education among american consumers. How do you fix this credit crisis? Not with a tax rebate, not with lower prices at walmart. You fix it by educating consumers about their rights and how mortgages work!!! The smart buyer who does their research is the best defense against a broker who is out to make money. If you need a home loan, but don’t know the first thing about mortgages, go to an actual bank branch. Banks as a whole only originated about 10% of the nations sub prime loans. It’s the national mortgage lenders who worked through brokers that caused the real problems…
I’ll get off my soap box now, thanks for listening.
(can you tell I work for a bank?)
Make no mistake about it. Excess consumer spending is what got us into this. We need to pay down debt, adjust our lives so we can live within our pay checks, pay prices for things that allow for paying American workers and stop wasting.
But we will try borrowing more money to buy more useless junk well past when it even looks like it is working.
Oh yeah, that’s what we are doing.
I think your right on with the Sleezy bank loans some people have been caught up in. I don’t blame John Q. Public for trying to get a better deal on a house loan but there is always someone out there who is just lurking for a fresh SUCKER! Laws need to be set up, there is no dought!
The quick way to get cash into people’s hands is to immediately cut the Federal withholding rates in our paychecks. That would save all the expense of printing and mailing checks and would get it into our hands next week, not months down the road. They just don’t get it in Washington.
Freeze all adjustable rate/option arms on mortgages at the most recent point the homeowner was not paying late for five years. Then contact each and every homeowner to re-evaluate whether or not homeownership is feasible and assist in converting to a fixed rate loan. This would put a stop to falling home prices, employ more people at banks who originated these loans to help their customers, and in turn people would start to spend more and purchase more properties. This will do more to stimulate the economy than any little tax refund check that most people will use to pay their heating bills and put food on their table!
Absolutley it is NOT going to help the economy. Getting people back to work in Michigan is going to fix it, until they do that people will continue to lose their homes and more!!!!!!!!!
I was beginning to think that we Americans might actually fall for this slight of hand trick- but from reading the comments on this post, it seems many of us realize we are being hoodwinked by the President and congress once again. Giving us money to buy Chinese goods at Wal-Mart will NOT help our economy but certainly help theirs.
Here, here to those saying stimulus must be spent on US manufactured goods. This sounds protectionist and I consider myself pro-globalization, but for this “stimulus” package expense to be worthwhile we don’t want to inflate asian economies at the expense of the US economy. I know I am just restating what Paulson(?) already said to Congress when he presented the package, but he is right!
As far as the question posed today, consumer spending is absolutely critical to our economy so yes it will help. If there is a recession it is already here and will be confirmed this Spring/Summer so it will not prevent it but it could certainly “soften” the landing.
Perhaps a more responsible approach to reporting “recession” by the major news organizations would help too. I find it interesting how the tone changes, even here. For the last couple weeks CNN Money’s article selection took for granted that we are in a recession and now solicits opinions on wether one will happen. I’m interested in how many decision makers at CNN Money were shorting during the period. Anyone got the “guts” to write a piece on that?
Giving a cancer patient a pain killer won’t cure his/her sickness. U.S. economy is sick because of over-spending by the government, carrying too much debts by the consumers and poor health of the financial systems. People need to learn to live within their means and save up some money for the inevidable rainy days to come. Continue to spend, spend and spend will only get people into deeper trouble. Cutting up the credit cards and just living on cash for a few months will teach people to live an affordable lifestyle. If one lives just for today, tomorrow may bring financial ruins.
The rebate will not do much to help our economy. However, since it is slated for “poor” people, who shop mostly at WalMart, it will be a great boost for the Chinese economy.
It would have been better to increase the corporate depreciation deduction. That would encourage investments by USA corporations and at least create more USA jobs.
I’m reading all about the consumer end here, but noone seems to be talking about another part of the stimulus plan : Small businesses can now write off 50% of expenditures. I work for a corrugator who has been planning an expansion. If he chooses to purchase the new machines now they will be 50 pecent cheaper (on taxes) will that not create the jobs that everyone is saying we needed? Lets think of this as well people, done right savvy enterprises can use this bill to jump start new production facilities keeping our resources home
It would seem to me that the problem is centered around the housing market (foreclosures and panic thereover, oversupply of new homes, increasing cost of mortgages). Stimulus more narrowly focused here makes more sense to me, and confidence will probably return elsewhere, because a thousand dollars when one is worried about their home seems like mockery. Though I realize cheap easy mortgage money likely caused our problem, perhaps cheap, NOT so easy mortgage money (e.g. low fixed-rate mortgates, real down payments, good credit) for a period, would get the competent investors to stabilize the housing market. Obviously, the poor investors/borrowers will still pay for their mistakes, but in such a way the solid ones may take the panic out of the equation. On the downside, I really haven’t contemplated the cost of such a mortgage subsidization.
Why does our President and the Union believe that giving us a ‘rebate’ is going to end a reccession? I always believed that we as Americans pick people to represent us who know what they are doing. I am SO dissappointed in myself and everyone else who voted for the people who are leading our country now. We have put our childrens complete future in jeopardy, every teen I talk to wants so badly to live some where else, their dreams are to grow up and move to European nations. I as a responsable parent cringe everytime I buy my 2 year old a toy, wondering what is in it.
Why can’t we bring our jobs back to the US? Why do we have to keep buying from overseas? I know people are going to say “There are some things we just HAVE to buy from overseas” – WHAT?! There is NOTHING from overseas that we can’t make ourselves – we are just consumed with making a buck that we don’t care what happens to our own nation.
I am so ashamed of what we have done to our own childrens futures – and these rebates are just another prick in the sore.
Universal Health Care would do wonders for the economy. As it is, my family of three pays over $700 monthly in insurance costs. If we didn’t have to spend that on insurance, I am sure we would be more than happy to help ‘boost’ the sagging economy!
I think the rebates are lollipops – make you feel better, but don’t do much to actually ease the pain.
As for the comments below on China, if it were not for globalization and the comparative advantage China enjoys in the manufacture of goods consumed in the US we would not have the standard of living we have today. Look to speech in the movie Primary Colors when John Travolta’s character says
“…we now live in a world without economic borderes. Push a button in New York and a billion dollars moves to Tokyo. In that world, muscle jobs go where muscle labor is cheap, and that is not here. So to compete, you have to exercise a different muscle the one between your ears…
…The whole country must go back to school. We have get smarter, learn skills…”
It is about time that this country wakes up and takes control of its own future.
we have got to get a handle on the price of energy to where people can afford it . if all your money goes to energy or taxes what else do you have to spend on other things??
The author is just another lacky with a agenda in the backroom…
WALMART cutting prices can be a STIMULUS. I don’t drink soda… but I do buy vegatables and other healthy options. GUESS WHAT… maybe other grocery retailers will also cut prices so us normal consumers can buy what we need.
Granted WALMART used the wrong marketing tactic and it comes over a bit TACKY by using the SUPERBOWL items as a way to get people into their stores… but atleast they are doing something. So why don’t you as a author be a little bias? How about encouraging WALMART and other groceries to discount milk, bread, egss, fruits, etc.? I try not to shop WALMART and try instead to support local groceries… but I will SHOP WALMART in light of better prices… if the competion follows suit we all start buying more essential items thus slowly the economy picksup (then compound that with the gov stimulus program)… tell me smart-boy(AUTHOR) where does it start if it doesn’t start with big box retailers cutting into their profits by dropping prices for us consumers who don’t make six-figures like YOU. Go stay a day in the house of a coal miner, retail-sales person, school-teacher, etc..
Get off your horse and lets be a bit more biased.
The current plan would be a nice beginning, too bad that a lot of people like myself won’t benefit at all. I would love to have some extra money to spend, but since I am a senior citizen existing on a Social Security benefit of less than $650 a month plus the small interst earned on my savings, which will be even smaller due to the interest rate cuts, I won’t be eligible to recieve anything. My entire monthly income is less than $1000. I paid taxes during all the 50 years I worked and even now pay property and sales taxes. I deserve something but because I’m not employed I am not deemed worthy of this rebate. I dare anyone is Washington, President Bush, Sen. Clinton, anyone to try to live on what I do. The rebate or payment should be for EVERYONE whose income from any source is less than $50,000. That would help more people and I guarantee the seniors in this catagory would come nearer putting the money back in the economy than many others.
You do realize, it’s not even $600.00, it’s more like $450 – $500 per person that qualify’s. Depending on the area you live and the TAX rate. (Yup, they give us, and they takith away!)
Borrowing money from the Chinese to give people a $500 check to run out and buy a new TV is not going to help anyone (other than the Chinese who make the TVs and collect the interest on the borrowed money) If we are going to borrow money it should be invested in American infrastructure. (Rail, electrical systems, bridges, etc.) These things provide jobs, training, hope, opportunity and create a positive long term return on the money invested. Or how about spending that money to figure out a way to free us from being Saudi Arabia’s oil slaves! What does the government giving people money to buy a new TV or gadget do for America other than make us fat and stupid?!
Tell me how taking money from one person and giving it to another person to buy something probably made in China is going to help OUR economy.
If part of this problem is due to the over spending by citizens to buy houses they could not afford and the foreclosures that this is bringing….then….$1200.00 will not help. In addition, is it fair for the people who have been frugal to have to pay for the errors of the greedy. What ever happened to the “starter” house, anyway???
You must be kidding me, how could we expect a rebate check to cure the woes of an economy heading into a recession. Our president has been so fiscally irresponsible [along with predatory loan scams] that we are now in this predicament. We need a fundamental overhaul and a rebate check will not cure these troubled times we are headed for. Let’s hope we can make it through the dark times ahead.
Thank you Jen!!! NO, NO, NO is so right. Why do I have to bail out the greedy house flippers, the stupid would be homeowners and DUMB banks??? My house is paid for, but this was done with hard work over 30 years.
If we want to stimulate the economy, how about some jobs. Maybe educating Americans on the concept that cheap goods only last a short time, whereas good paying jobs can last a lifetime!
Well once again, lucky me (and my husband) make too much money and will not be getting a rebate. When are we going to stop rewarding people for not even attempeting to find work. Both my mother and her mother would supplement the meager money my “legal” Italian immigrant grandparents would make by picking fruit and vegetables at the local farm for very little money. We need to use seasonal immigrants because Americans are too good to do that kind of work. What happened to the mentality that if you want to eat, you will work. Enough handouts already, especially to people who shouldn’t even be in this Country. I am so tired of supporting “entitlement” people.
Perhaps some analysts in D.C. have information that we haven’t seen yet, but it is far from certain that we are heading into a recession. Yet, a stimulus package is a good political move. A recession is possible, especially with all the recession attention — we could talk ourselves into one. Therefore, politically, a politician looks good for doing a stimulus package if it turns out we needed one, and there is no accountability process if we did not need it.
Ironically, the best economic result of the stimulus package will come IF taxpayers do not spend it, but rather if they use it to pay down debt. The major challenge facing our economy is the hesitation that lenders have in lending money. If people pay down debt, perhaps the lending process will loosen up again, especially as the Fed has moved from a restrictive regime of rates to a more neutral stance. (Yes, I am aware that too much money was lent a few years ago, but we are a long ways away from such excessive leniency.) Nevertheless, it seems unlikely that a one to two thousand dollars is going to make much a dent on credit scores. So this stimulus package will be good for political show, but the real recovery will be due to FED action and the inevitable (but slow) resolution of questionable debt quality.
Let me see- borrow a bunch of money from China and Saudi Arabia, then spend it on Chinese goods and oil.
Dohh!
Economy was doing great. People were buying houses left and right. Activist say “Poor people are being left behind, they’ll never be able to afford houses” Government “encourages banks and loan organization to make more flexible loans available to the “poor” The response to that “problem” was exotic loans that counted on the ever increasing value of homes and the greed of those who thought they could make a ton of money by “flipping” a house. The result is no one is taking responsibility for any of this.
Best bet to stop a recession, start drilling for oil in our known reserves like off the coast of Calif. and Alaska. Maybe when oil hits $6.00 a gallon
I doubt it will do very much. Data from the previous rebates shows the effects are short lived. If used as a band-aid until real work is done (reform on mortgage lending practices, pricing of medicines among other items) then I can see the use of but no one (independent Democrat or Republican) has any real intent of reforming anything in a way that eases burdens on consumers. Sadly the only ideas out there mean greater taxes and less money in the pockets of every one. I believe our biggest problem with the rebate is that most people won’t use it to pay off debt to increase their discretionary funds. Increase what’s left after bills increases what’s either spent and/or reinvested over long periods of time. Instead I believe “Rent-A-Rim” in Charlotte, NC with their “cool” income tax return commercials will do well for leasing $10,000 chrome spinning rims on a $5,000 broken down SUV.
The entire idea will not help the ecopnomy UNLESS the spendingrebates are directed to goods manufactured in the USA.The way that it is proposed will only increase the profits in China and add to our deficit.
The tax rebate will not boost the U.S. economy but it could do wonders for the Chinese economy if everyone spends their check at WalMart.
The “stimulus package” being offered is another completely irresponsible play by congress pandering to the immediate gratification lusts of the American people. What is being completely ignored are the deep, fundamental factors involved. The ‘tax rebates’ will only serve to devalue the dollar further, increase the trade imbalance, add another load of debt, increase the deficit and lower our standard of living. We need to look back a good number of years when the United States shifted from a manufacturing/industrial based, exporting economy to our current position as the world’s largest importer and debtor. We are truly products of our own cravings. We have moved from being a people who knew terms like ‘personal sacrifice’ and ‘delayed gratification’ to a people who just can’t say “no” and the idea of not having what I want “now” is absolutely un-American. We have turned to government to be our deliverer from any inconvenience and see the Federal Government as an inexhaustible vending machine for everything that hinders our personal happiness. We have welcomed an ever-increasing government, with massive taxes and endless regulation. Lawsuits, insurnace costs, taxes, regulations… these things suck more out of the economy than the price of fuel and the cost of groceries.
If we choose to ignore the deep-seated, fundamental problems, the future is dismal. In short, we get what we’ve asked for.
Who is the guy who thinks that when an
investor reinvests his dividend in the market, the company uses the funds for
capital spending, wages, etc? Get a grip(and some education).
Couldn’t we do something else to stimulate this economy besides enouraging people to buy more lead-coated junk from China?
What about pulling out of Iraq and using those funds to sponsor building nation-wide infrastructure that supports the use of solar and other alternative energy sources. This would create lasting jobs and eliminate our dependence of foriegn oil!!!
Americans paid artificially low gas prices for decades. Lowering the price of gas will only make us drive more. We are not disciplined enough to suck it up and drive less or carpool. We live in the age of entitlement — far too many of us think we should have the biggest cars, cheap gasoline, huge houses and multiple pieces of every electronic device known to man simply because we are … Americans! No wonder much of the Third World hates us.
The government cannot generate rebates fast enough to save us from a recession. If we’re in one, it’s too late: the checks will arrive in the upturn. Unless, of course, the economy really tanks, in which case the stimulus is too meager anyway.
Great. $600 just so everyone can go to WalMart and buy more cheap, imported Chinese junk. The economy that will be “stimulated” won’t be America’s; it will be China’s.
Here is my view of the problem, and why we’re at this point of financial chaos. CEO’s, National Debt… Two very similar creatures. I see the vicisous cycle is a lot more simple than most people think.
1. CEO’s want more cash, so…
2. They want less people to hand a paycheck to. so…
3. They layoff the workers. and then…
4. Use 1 machine to do the same work it took 4 people to do. and now…
5. Those 4 people can’t afford the house they were in or the revolving credit they had. So…
6. Those 4 people are forced to buy ‘foreign’goods since they are cheap. and finally…
7. The government, gives us all $600.00 to give us a ‘boost’, when in all reality, those 4 workers, are going to take their family out for dinner, get the oil changed in their care, since it’s been overdue for 2 years now, maybe get the kids some new clothes, since they outgrew them… all the while our National Debt continue’s to kareen out of control (which of course is where the $600.00 is really coming from) Just doesn’t make sense… and the part that amazes me the most. We can put a man on the moon, but our government can’t figure out how to spend money wisely. (Maybe cause were to busy putting men on moons? Or Rover’s on Mars?
It’s not just the Fed. Our entire country needs a lot more testosterone in order to face and solve our problems. Cheap Pepsi and chips at Wal-Mart for the Superbowl…didn’t the Roman’s try the eqivalent of that…look at what happened to them.
Where in the whirring weed eater of companies hiring and selling and people being hired and buying, do you stick your hand? What confuses me is the losses by the financials and home builders this year don’t wipe out their gains of the past 4 years. Why is anyone in a hurry to help them?
I SAY LET THE TOYOTA MOTOR COMPANY THEIR, FINANCIAL PEOPLE, RUN OUR ECONOMY AND YOU WILL SEE THIS COUNTRY GROW LIKE THEIR BUSINESS HAS .WE NEED TO PRATICE WHAT THE JAPANESE ARE DOING!
My question is where does the $150 billion come from? Are they going to tap into our Strategic Pork Reserve?
I’m “middle class” and five or six hundred dollars (even double because I’m married), while always welcome, will do nothing to solve my budget crisis! I live within my means which means I don’t have a “balloon” mortgage and I drive cars that are paid for so I don’t make car payments (is that anti-american?). What I do have is a budget crisis paying for food, gas and taxes! My children need massive loans to pay for college because I can’t afford to help! Why are we one of the few countries left that requires it’s citizens to pay for tuition… no wonder we’re falling behind? This country needs manufacturing jobs to pull it’s economy out; not GW’s “service sector” minimum wage panacea (he’s pretty proud of creating nothing jobs).
Not a chance. Most deep in debt people will use the money to make a payment on their credit cards – in other words, pay for stuff they already bought. As an economist, I cannot say I am surprised by this vote grabbing plan. The government has to look at reality – poor lending practices and ever increasing costs of living have sandwiched the middle class. The solution? Let the recession happen. It will hurt, but it will wipe the slate clean and some over-zealous borrowers who treated their homes like an ATM may learn a lesson in finance in the process.
The money will have no real impact on the economy. Mostly what it will do is let people relax a couple of months as the stimulus helps them pay for the high cost of fuel and entergy. This is just a feel good package during an election year, nothing more.
They also need to stop calling it a tax rebate, once the House decided to give it those that do not pay taxes (low wage earners), it stopped being a rebate. That’s not to say low wage earners can’t use the help, it’s just you can not get a rebate if you did not pay in the first place.
What bothers me the most is the Feds keep cutting the rate. While some may think it is a great idea, let me remind you that when you cut the rate, you devalue the dollar. Raise rates to strenghthen the dollar and you will see more investment in the markets which in turn will help the economy.
We have a stagnant population and the only reason that the economy has grown is because most of us have taken on more and more debt. It’s now coming to a head. The only REAL way to improve this economy is to grow the population. We need more consumers. Jobs aren’t the issue. As long as the population increases at a steady rate the jobs will keep up because of the demand created by the increased population. Since it doesn’t appear that birth rates are increasing it’s time we really looked at allowing more people into this country so they can work legally, we can collect their taxes, and we can get back to really growing instead of surviving on the fake growth that increased debt allows us.
Send my family the largest check possible. It’ll be going into the high yield savings account ( allthough not quite as high as it was a few months ago) as more cusion for my emergency fund.
I don’t understand how our goverment thinks that this stimulus package will help. This is only a bandaid at best. Our goverment is still pushing for a two tier society. What we are experiencing is only the begining.
I think it is imparitive the Attorney
General of the U.S. along with Congress comb through all of the losses
the banking industry is claiming.
Like many so called “business minded economists”, the author of this article look only at the surface, therefore not seeing the real problems.
Cite: “Many investors used the income from dividends not just for spending, but more importantly, to reinvest in the market. In turn, businesses used the money invested in them for capital spending, hiring and other measures that can boost the economy.”
The big question is “Who’s economy are you talking about?”
Investors eye the fastest/biggest profit. Today US import more manufactured goods than export. In order to achieve that, these companies build factories (aka invested) more offshore than domestically. All this offshore investment it is a modern trend, many years ago US used to be a manufacturing powerhouse.
Giving more tax cuts to investors while not implementing ANY legal actions to force them to invest locally, you just give them more opportunities to invest offshore, since this is the current trend. And by this, you bring more unfair competition to the few old factories US still have.
Because of that, we can say that as much money you let investors keep by low taxes, as many US jobs you actually destroy !!! Tax cuts for the rich (without regulation) = US economy collapse.
Yes, those money are going to be invested to stimulate China’s economy. But US economists are supposed to actually be interested in US economy, aren’t they ?
If you want a REAL economic stimulus by cutting the investor taxes, here is the deal:
1. Double (at least) the tax rate on dividends and capital gain
2. For the money they put in existing US companies, give them a 50% tax cut, therefore matching exactly the same rate as today.
3. For investments in new companies, domestic startups, give them a 100% tax cut.
I hate to look a gift horse in the mouth, but I see the tax rebate doing little with regards to the big picture of problems. Most of my friends are the blue collar working class, many who worked in the housing boom, that are now doing anything they can do to keep their families afloat. They are talking about this money helping them buy food, pay the electric bill, etc.; not anything new that is tangible that will help any industry or generate new jobs.
Seems like this country has fallen down in that it generates (in or imports) in more than is needed at this point. At that is the problem, we have become like the kid who is allowed to eat all he wants at the buffet, only to complain later of a stomach ache. Seems like the bigger question in a “Global” economy needs to be how this country can position itself to be a producer of what the rest of the world still needs. And it needs to figure out quickly how it can product such better, faster and cheaper – than other countries can produce at home or get elsewhere. The rest of the world has aspired for the last 50 years to be like the U.S., only the dirty little secret is now that many are, they have figured out they don’t need the U.S. either….
The U.S. needs to become the Walmart to the world, instead of continuing to enrich the rest of the world by spending at our own Walmarts!
@Dave
The strategic reserve of oil is commonly known to have ‘6 months’ of oil, however it actually is ‘3 months’ of oil at our current usage rate of about 22 million barrels per day, so even if they did that it would also be only a short term thing. Really the strategic reserve is probably now considered for emergencies only for security purposes such as the military and not for citizens.
In the State of the Union address, President Bush identified the need for the engineers, inventors, and other “techie” types to find creative ways to boost the economy (and ecology) of America. Unfortunately, America produces less and less of these types of people. The new, creative ideas are being generating in other parts of the world. Its easy to see why – techies are belittled in our society while sports figures, actors, singers, etc are adored and highly rewarded. Why would anyone want to spend years of hard work to learn to do a job in a field which isn’t respected? Especially since much of the work is going out of the country to people who live where their talents are recognized and rewarded. We need to recognize the value of these people, rearrange our priorities, and encourage our youth to pursue these fields of endeavor. Until we do, our economy will continue to slide and lose ground to the rest of the world.
Please tell me how we are supposed to borrow our way out of debt. Extending cheap credit to banks, already in trouble because of bad lending policy, only leads to devaluing the dollar. Then we print more worthless dollars. And borrow from Asia to support our bank weakness.
I agree, encouraging investment is a much better option than providing a rebate check. However, I’m always concerned when I hear that the government needs to do something to protect people from banks offering exotic mortgages. The real problem is the people, not the banks. Banks, just like used car salesmen or any other type of salesperson, will try to push particular products. It’s up to people to choose if they want to “purchase” them or not. When I bought my home 2 years ago, my mortgage broker pushed an exotic mortgage. I did the research and said no, choosing a fixed mortgage instead. I’m tired of everyone trying to protect people from themselves. People need to take responsibility for their own actions.
Greed. Houses are made to live in, not for greedy investors to use as gambling chips. This is why housing prices have gone sky high. This is why fewer and fewer regular folks can actually afford to own a house. But you can’t put the brakes on runaway capitalism, can you?
We are already in recession , but the people who have the real money are the last ones to feel the pinch, hence all this noise about “looming”.
I think when people get their 600-1200 dollars they are going to do one of two things: Pay bills or Save it. This won’t help the economy much. American’s savings rate is the worst it has ever been. We live on debt just as our country lives on debt. Getting American’s to spend more isn’t the answer. Fix the problem of preditory lending and fancy mortgages that people can’t afford. When I bought my house 4 years ago, the credit company tried to put us into one of those fancy scheems. I refused and now have a traditional mortgage I can afford and I know won’t become unaffordable.
This President STILL doesn’t get it and probably never will.
We need CHANGE!! Vote Obama!!
The gap between rich and poor grows as the middle class is squeezed out. What we need in this country is JOBS! Our manufacturing jobs that once allowed a single-income family to support itslef have gone overseas. They aren’t coming back — we need to protect the remaining manufacturing jobs we have. Companies like LL Bean who used to proudly buy everything made in the USA can no longer compete without selling items from China, Taiwan and the Phillipines.
We can’t spend our way out of that!
The “Tax Rebate check” reminds me of GM & Ford & Chrysler attempting to stimulate car sales with large rebates. Yes it works in the very short term, but not a long term fix. In fact, it hurts in the long term.
Let’s see if I got this right, we spent and borrowing irresponsibly and now the government is giving us more money (actually our own tax money) and if we spend more irresponsibly now we’ll solve our initial irresponsible borrowing and spending. Seems to me this doesn’t make much economy sense since most of what people will buy is from overseas manufacturers. What this country needs is investment in itself and its people. How about a government federal or state program were we fix infrastructure like roads and bridges. Lower the cost of higher education so more people can afford go to college. Create tax policy that disincentives outsourcing of American jobs. Now maybe this might turn things around but it’s not a quick fix. Although this doesn’t make the votes feel good in an electronic year so let’s do the feel good thing and hope for the best. Our government at work for its people.
As a realtor it still shocks me to think that this was all such a surprise. How on earth did the government not see this happenning? Well they did, they knew that this was coming down the pipe. As for all of the foreclosures well come on people read your loan documents.
Wal-Mart is just playing to the crowd. If people want to fall for it let them.
Reducing the cost of energy would be a bigger help than a rebate. Why not flood the market with cheap oil from the strategic reserve? Since it’s money the government has already spent, it won’t increase the deficit, and Congress could legislate incentives for new refining capacity as part of the same measure. It would have both a long-term and short term jolt to businesses in the US.
The housing/mortgage mess is what has our economy in a funk. How can a person, who probably making the biggest investment of their life, not understand what they are getting into? Either ignorance or greed is our problem. Will a rebate check change that??
The current package will not do anything to stimulate the economy. The individuals that need the money the most are the ones that are already up to there eyeballs in debt. I would hope that those individuals will use their rebate check to pay off some debt. If they go buy more stuff, they are no better off than they were and we have just flushed $150 Billion down the drain. It could push people into even more debt. Personally, the $600 check I should receive will not make me go out and by anything differently than I already do.
If the government wants to stimulate the economy. Suck some oil out of our strategic reserves and drive down gas prices. Do something to help seniors with heating oil costs. I would like to see us spend the $150 Billion to replensh our strategic oil reserve. Get gas and diesel back down around $2.00 and you sill see some people stimulate the economy.
As for the people and their forclosures. Is it really always the banks fault, or could it be people have a problem over stretching themselves. I know things happen beyond our control, but I would guess that the some of the forclosures are nothing but that individuals inability to think smart.
Awarding the people of the United State a tax rebate is, in my view, a mistake. However, for those who are in serious debt, then the rebate will be a minor fix. The majority of the people live beyond their means and survive by using a credit card to purchase whatever they need or desire rather than first saving their money and then make that purchase. Why buy a home that needs two paychecks to pay the mortgage. Scale down and buy the home to suit the family. Those houses are out there, people just want to live extravagantly. Folks must live within their means, that is what my family taught me. My husband and I intend to reinvest our tax rebate and draw interest on it.
Will the rebate checks keep America from a recession/depression??? Seems to me we are in one right NOW!!!!
What we need is a more structural change to the economy to end the recession. That structural change needs to address a major inefficiency in the economy.
One major drag on the economy right now is energy prices – and the associated inefficiency with energy prices is the lack of ability of people to change their consumption level of gasoline in response to changing prices. This lack of responsiveness has been created by decades of neglect for our transportation system that has left the personal automobile as the only reasonable choice for most Americans today.
If our politicians can restore the freedom of Americans to choose from many modes of transportation, our economic vulnerability to energy prices would disappear!
Ummm, send Americans a check for 500-600 or 1100-1200 and they walk into a Walmart and spend most of it. Wow there is some real economic impact, NOT. How in the world can we as Americans walk into a store that stocks virtually NOTHING made in America and spend money and have any fantasy that it is going to have any long term positive economic effects in America? Walmarts “stimulus plan” is right up there with the White House plan both are in my opinion garbage.
Obviously, a one time check of several hundred bucks is fun to spend, or will help those struggling for basic goods. However it will do NOTHING to help the economy. Here’s a better idea. Government run health insurance for all. Yes, we will pay more taxes, but this would be worth it, if we could run our system like the Brits. People now live in fear of bankruptcy. Want to stimulate the economy? Just eliminate this fear of medically incurred bankruptcy and financial ruin
When I read the title of your article, I was excited that you may touch on the thought that I have concerning this tax rebate: the company to benefit most is Wal-Mart. A couple hundred dollars in the pockets of middle to low income families will not send the masses to PF Chang’s or an Audi dealership… but as the consumers make their weekly trek to Wal-Mart, it will encourage penny-pinching mothers to let their kids buy that certain toy, or hard working husbands to consider ribeye over the usual ground beef.
I have to agree with Chuck from Fort Valley Georgia. One of our biggest problems right now is that the US has become a country that doesn’t seem to make anything anymore. How do you export brokered mortgages or “consulting”? We seem to be relying very heavily on importing cheap stuff from overseas while all he time losing our manufacturing and R&D jobs to the countries we are buying from (a vicious circle if ever I saw one) I try to sell as much “Made in the USA” as possible, but it is getting increasingly difficult to find these products. We need to boost our output of quality, inexpensive products and stop going to countries like China for cheap stuff to sell at Walmart. If we had more growth industry here, we would all have more money to buy products we made, even if they cost a little more.
Blue Heron Organics & Natural Products
Politicians do gradually get smarter over time. In the 50’s Dwight Eisenhower, to boost the economy, asked all Americans to spend 50 dollars on something they didn’t need. Sadly, most Americans didn’t have the Fifty to needlessly spend. The new plan gives now provides the cash to buy afew things we do need.
No. No, no, no and no all over. Let’s take a look at what we’ve attached as the root of our problem – people who have gotten over their heads in debt. Like major over their heads, it’s not living paycheck to paycheck, it’s borrowed time. Next paycheck is spent, as well as the one after – and I bet most people make more than $600 in a two-week span. $600 is a lot of money to someone who is destitute. We’re not quite destitute, just not comfortable enough to afford luxuries.
To those in that sort of trouble who haven’t yet said “F-It, working is getting me nowhere, I’m going on welfare” that $600 will be eaten in a matter of seconds. How many people have promised their rebate somewhere already?
Personally, I promised mine to my savings account. I hope.
What is the rush with this stimulus package anyway? Back in 2001, it made sense to put together an instant stimulus package, because the IRS would be able to get the checks out to everyone within a month or two. But this time around, in the middle of tax season, they cant get the checks out for a minimum 4-5 months. By then, our “recession” could be over and the rebates wont really do anything to help us get out of one. They could have waited until March to propose a stimulus plan, giving more time to come up with better ideas, such as other dividend rebates instead of just tax rebates.
You said exactly what I was thinking – you can’t just throw $600 at everyone and call it a day. At the very least, it may be a band-aid, but not a longterm fix.
“Getting people to spend more is only one way to fix the economy’s woes. To really get the economy back on track, what’s needed is an overhaul of the mortgage lending process in order to protect borrowers from overzealous banks pushing exotic loans that the borrowers really cannot afford. ”
So make it even more impossible for people to buy homes? Do you really think this is what’s needed? isn’t the real problem simply greed with a sprinkle of stupididty? Is a $100k house really supposed to sell for $500k!?!
Can we spend our way out of downturn? Good lord, no! $600, even $1200? With many Americans carrying an average of $10,000 in credit card debt, this is laughable. What kind of “dent” will this make in that kind of debt? It’ll still take that American about six years to get out of debt — and only if they pay more than minimum payments and charge nothing else. $600? It’s one house payment — if you bought your house 20 years ago and it didn’t cost more than $60,000. It’s two car payments — if you have a teeny weeny car. It’s groceries for two weeks for a family of four that doesn’t eat much. I don’t know if I’m more upset that the govermnment thinks they can buy us off with $600 every seven years or because they obviously can.
This guy Lamonica, judging by his resume, really isn’t a professional economist or investment manager. He appears to be a journalist. Why should anyone listen to him and why is he given such an influential forum, when there are thousands of people out there who are far more qualified to discuss these types of issues?
The bad thing about the tax rebate to me will be that a lot of people will have to use the money just to try and catch up on what they are behind. Gas prices, food prices, heating and cooling, etc.It won’t be like its just extra money to spend for many. This woudln’t even be considered a drop in a 55 gallon drum to people that are having mortgage problems and really do want to keep their homes.
There is not a way out right now. To many people losing their jobs to companies that are moving overseas. Its kind of like all the robots that are making our cars now. I haven’t seen a robot buying a car of driving one down the road yet. You layoff people that are making the products and then they get jobs that can’t and won’t pay enough to be able to buy the products they were making to begin with.
I liked your article. I liked the fact that you brought the mortgage lending into picture. However, one thing that has not recieved attention is teh fact that builders also have a big role to play in this whole thing. A builder building a new home artifically raises the prices, putting upward pressure on the houses in nearby areas. Once that buble bursts, house prices don’t find a bottom until it meets the bare minimum cost of building that same house. that’s what is happening in the market now. Govt should aslo make sure that budilders don’t cause this mayham in future- may be by making it mandatory to disclose the cost of buidling teh block of houses( not one house!).
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The lower income people that this rebate is designed to “help” are mostly unaware that…
The checks are an advance on next year’s refunds, and most, if not all of the money, will be deducted from taxpayers’ refunds in 12 months’ time.
While some coudl be excited to have some $$ on hand now, those same people will be hurting even more at tax time next year. People who normally break even with their taxes will be looking at paying instead. People who get a little back each year will be surprised to find they get nothing and may even have to pay. Those that regularly pay will be even further in the hole. I don’t think people realize exactly what the government has in store for us by this “stimulus” plan. It’s going to be very detrimental in the long run for our economy.