>Reflections: Stimulus package and Tax Rebates

>It looks more likely than not that President Obama’s economic stimulus package will get passed by President’s day (Feb 16). This includes the various consumer stimulus and rebates, most notably the $500/$1000 tax rebate that most Americans will qualify for. I have written in detail about the tax credit/rebate (including how it will be paid out) and the overall American recovery stimulus package, which essentially boils down to a mix of tax cuts (about 30%) and government spending (70%). The economic stimulus has received wide coverage all over the Internet and I know that the articles I have written on it have been hugely popular from a traffic and comment perspective. This is not surprising given how many people will be impacted by the stimulus spending and tax cuts.

For most people, the $145 billion tax cuts (over 2 years) will be the only money they directly see, with 95% of families (or those with a household income less than $150,000) qualifying for this tax credit. But, will $1000 make much of a difference to the average American family? And, how will you spend it or are you planning to save it and defeat the purpose of the “stimulus” effect?

I know $1000 will not be a life changer for most people, but as a reader on one of my posts on this topic said, “something is better than nothing, and if the government is printing money then I want my share too!”

For other recent stimulus related information and commentary check out some of these great reads from folks on my Blogroll (which was recently updated):

  • Sachs: A Fiscal Straight Jacket (@ Economists View) : Jeff Sachs is worried that the stimulus package, especially the components involving tax cuts, will do more harm than good by starving the economy of the revenues needed to fund vital programs:
  • Stimulus Package Was Needed But It Won’t End the Crunch (@ Bible Money Matters) and says “Is it just me or do these guys all sound like they’re really not sure what to do to turn things around? Are they just trying a bit of this, and a bit of that – hoping that something will stick? That’s the feeling I’m getting.”
  • Income Re-Distribution Features of the 2009 Stimulus Plan ( @ Tough Money Love) and says “If the government wants some of my income to be turned over to someone else who needs it more and is deserving, I would prefer to hand that other person a check directly.”
  • No 2009 Economic Stimulus Check? How Obama’s Stimulus Plan Affects The Middle Class (@ The Digerati Life) and says “Apparently, those stimulus checks handed out last year did little to help the economy…In fact, critics are claiming that China was the one who mainly benefited from this cash infusion as American shoppers spent their checks on electronics manufactured overseas. I find that horribly ironic, if accurate.”
  • Obama’s $819 Billion Economic Stimulus Plan (@ Free From Broke) who says “Not a single Republican voted for the plan which didn’t matter as Democrats hold a vast majority in the House”
  • Economic Stimulus Package – What Does It Mean To You? (@ Money Smart Life) and comments “Whether this spending or tax cuts effect you directly or indirectly, the thing that stands out the most about it to me is the fear and urgency that spurred the passing of the bill and that seems to permeate society. “

To get comprehensive coverage of the Stimulus package and its progression check out the NY Times, Wall Street Journal and USA Today

I also got back on the carnival and festival bandwagon this week, participating in the Carnival of Personal Finance, Money Stories and Festival of Frugality. Great effort by all the hosts and check out some of the great reads there.

Finally, a shout to Get Rich Slowly, who is hoping for his millionth visitor this month. Give the quality of JD’s posts, you won’t be surprised to see wh
y he gets a million visitors a month.

Have a good Superbowl weekend!
Picture Credit : That Minority Thing

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