Dear President (elect) Obama (and Congress): Please, no stimulus checks

[question everything]

Sure, we can use the $600 or $1000 check. Our heating bill for December is $200 and will probably be the same for January. And I really would love to send more money to my IRA account (money fund or treasuries only). And, of course, we don't know how secures our jobs are.

But what we need is more jobs. We need people to get jobs so that they will pay taxes so that government agencies will be able to keep their unemployment funds solvent. I've heard that California's will run dry in a couple of months.

And if people have jobs they may even go shopping.

I've always cringed thinking how shopping is the fuel of our economy. We even went to the mall to purchase some stuff that we don't need just to... spend. And we stopped at several small business stores, in some cases just to ask questions and when we left we commented that we hope they stay in business.

Yes, when one is unemployed, any additional money helps. Benn there, more than once. But what unemployed people need is jobs. And investing in infrastructure, that provides needed work while providing jobs using many skills - is the way to go.

And Congress.. this is not the time to "flex your muscles." Chances are your districts can benefit from this type of investments, too. And if you are from a red state that has been a net receiver of our tax money: think again. This pool can dry, too.

[monmouth]

1. Working on the infrastructure immediately will open up immediate jobs

with paychecks. I'm with John Kerry on this one.

[democrattotheend]

29. But not for everyone

New infrastructure mainly opens up new construction jobs, which doesn't help everyone. I read a great article on HuffPo the other day about how a lot of the projects Obama wants to invest in will create jobs in sectors that are mostly filled by men, such as construction and IT. Not that women can't do those jobs, but there are not that many women in construction and women tend not to be as strong as men physically so that is unlikely to change.

Plus, not everyone is looking for a construction job. Some people are trained in other fields that would not get new jobs from direct government investment but might benefit from a tax credit that helps employers create more jobs in their field.

[question everything]

31. The physical aspect of building an infrastructure is just one part

there are always administrative jobs and associated industries that pop next to such sites, as we have seen during the rail and the interstate projects.

Still, I would think that many laid off auto workers, who are used to work with their hands, can recognize different tools, would be a good fit.

[merh]

I believe the thought behind the stimulus checks is that they will help

folks keep their jobs. Restaurants and retail stores are closing because people are not spending. The stimulus money is intended to go back into the economy to prevent the loss of more jobs.

[firedupdem]

4. Thank You, Thank You, Thank You... n/t

[question everything]

6. No, they will not. Did not happen in 2001 and not last year

as long as people feel insecure about jobs and the economy, they will either pay down debt or will put it in saving for the bad days ahead.

Many have money, they just don't feel confident enough to spend it, not knowing what is around the corner.

[merh]

17. Well, let me question you then?

Do you have evidence that the money didn't go into the economy and provide a much needed boast or are you just speaking from personal experience?

I know small business owners that are struggling and that see the stimulus as needed, are they wrong to hope that some money comes there way?

[question everything]

24. There were many reports at the time of those checks

that showed that most people put them in their banks, or paid down debt.

Let me ask you: If you are not certain about your job, or about the economy in general, will you keep the money or go spend it on "stuff" that you probably do not need?


OK, found one story, from last June, when the outlook was not that bleak. Yet.

U.S. consumers earmarking rebate checks for necessities, not shopping sprees

http://www.iht.com/articles/2008/06/01/business/01checks.php

[merh]

28. But whether the rebates (tax credits - I get back more of my money)

go to paying to survive (utilities, rent, mortgage, credit debt) or whether it goes to retail (groceries, needed clothes, tires for the car) it still goes where it is needed and to those who need it, the people.

Obama's plan calls for money that goes to help in people now and for long term efforts.

Are you saying that folks should just muddle through and not get any money and the focus should be on providing jobs alone?

[northernlights]

32. actually it *doesn't* go to those who really need it

the ones without jobs who are struggling now just to survive. The ones who lost their homes and businesses and are living in their cars. They won't get stimulus checks to go out to a restaurant.

[merh]

33. that is contrary to what the post I replied to contended.

the money saved in the paycheck goes to pay for necessities, why is that a bad thing?

Should there be no money to the citizens?

[Zynx]

35. We did get one good quarter of growth out of it in the 2nd quarter.

The economy's free fall was probably delayed a little bit by them. The CBO's report this week confirmed this hypothesis.

[Occam Bandage]

8. Unfortunately, they don't really work.

In times of financial uncertainty, people just use them to pay off credit card debt or mortgages. It doesn't go into the short-term economy, and there are better ways to help the long-term economy.

[merh]

14. And that is needed.

So don't give anyone any money to try to cover their bills and focus on the long term needs, is that what you are proposing?

What happens in the meantime?

[Occam Bandage]

20. But that is only helpful in the long term, and we're not talking long term.

If I put a thousand dollars into paying off student loans, my long-term financial health is better, and I might be able to buy a house or a better car or start my retirement investment earlier than otherwise. It will not, however, induce me to buy a television tomorrow, because my immediate financial state is unchanged. I will not provide any immediate stimulus to the economy.

Cutting Americans checks didn't have any apparent effect the last two times, and handing the money to businesses hasn't worked either. I like allocating cash to infrastructure-building programs and research, but then again, aside from the jobs they create, those only pay dividends in the long run. Jobs creation programs of any sort I think is most effective for short-term stimulus, especially with the unemployment rate threatening to hit double digits over the next year.

[merh]

25. Doesn't his plan provide for tax credits to the workers

and for building of the infrastructure and creating more jobs?

Isn't it both short and long term?

[northernlights]

30. didn't work last time around

and it won't work this time, for the same reason as before times 10.

People will use the stimulus checks to 1. pay down debt or 2. save for when they lose their job.

They aren't going to start going to restaurants (or malls) now. Well, maybe malls during liquidation sales to stock up on socks and sweaters.

OP is dead on right. Jobs will refuel the economy. Fixing the foreclosure mess will refuel the economy. People won't start spending until they sense job security and a future. Period.

[merh]

34. it takes times to create the jobs

Am I to understand from your posts that folks just need to wait and don't need money now?

Obama's package contains both long term efforts and the immediate stimulus. You'd have him cut out the immediate?

[phleshdef]

2. We can do both and the proposed plan is attempting to do both.

[Lyric]

3. I'd prefer stimulus checks for the poor and the elderly

who need the cash more than anything else, and job creation with the money that would have gone toward the middle class.

Unfortunately, there aren't many middle-class people who'd go for that. This is America, after all--we begrudge every mouthful of food purchased with Food Stamps because somebody "got something" that we didn't. *sigh*

[question everything]

5. That's a good compromise

but will any member of Congress show courage and suggest it?

[Occam Bandage]

9. Doubt it, and I wouldn't vote for it either.

Anyone with an income under $150,000--that is, most of my constituency--is having difficulty paying the bills right now, and is terrified about the immediate future. If I give some relief to my constituents making under, say, $30k, while giving the cold shoulder to my constituents making $70k with two kids in college, I'm going to have a problem.

[Lyric]

22. "Difficulty paying the bills" is not equivalent to "difficulty surviving."

I'm sure you know that, and *I* definitely know that, but most "average" people don't really care. They honestly see no difference between a family making $100k a year having trouble paying a mortgage or paying credit card bills, and a family making $15k a year having trouble buying food and keeping the electricity on during the winter. Both are "struggling," so both should get help. Nevermind that the struggles of the poor and the elderly are far more severe and immediately threatening.

Sad but true.

[Occam Bandage]

26. I know that, and you know that, but most of my hypothetical constituents don't.

They indeed don't see any difference between their difficulty making ends meet as regards their mortgage, tuition, and car payments, and someone else having difficulty making ends meet as regards their grocery, heat, and electricity payments. They don't see any difference between their having to use coupons and buy store brands and someone else's having to go without fruits and vegetables. As you say, both are "struggling."

And so as a Congressman, I'd be suicidal to vote for relief for the poor without also including relief for the middle class. As you say, sad but true.

[Lyric]

11. Not likely. Recall that these were the Congresspeople

who caved in to Repuke outrage about the poorest of the poor getting $600 like everyone else last time. They cut it in half, and the most needy people in the country got the least amount of money. That was soooo stupid; poor people are the best bet for "stimulating" the economy, because they spend their money. They don't have savings, they don't have retirement accounts to contribute to, and most of them don't even have credit cards to pay down because they don't qualify for credit. They would have spent it on groceries and household necessities, thus stimulating the economy far more than some middle-class family who paid on credit cards and socked the rest away in savings. *sigh*

The way this country treats the poor is a disgrace; we have lost our nobility and replaced it with greed and selfishness. :(

[Occam Bandage]

7. His infrastructure plan will create many honest jobs with good wages,

building infrastructure that will help the economy grow the employment market long term.

[WI_DEM]

10. Obama has already indicated that there will be no stimulus checks it will be payroll deductions.

[question everything]

12. Isn't it the same thing? More money in our hands to...

spend - they want - but to save and pay debt as we will, while having less in the hands of the government.

[phleshdef]

13. More money in our hands = trickle up. Are you still advocating for Reaganomics here?

[Occam Bandage]

21. Demand-side is the polar opposite of Reaganomics. nt

[phleshdef]

23. Not disagreeing. I'm just saying, giving a majority the people more relief isn't a bad thing.

I'm talking specifically about the government taking steps to stimulate the economy. They tried stimulating it from the top, hoping the bottom would reap the benefits. That doesn't work because of the greedy nature of people in general. So if they are going to actively stimulate the economy by putting more money into it, starting at the bottom is more likely to benefit everyone. Average people will spend extra money when they have it to spend.

[Occam Bandage]

27. Ah, I see your point now. nt

[WI_DEM]

15. You specifically mentioned stimulus checks and I was just telling you that isn't the plan

I wasn't debating you.

[FrenchieCat]

19. No, it isn't the same thing.

Because you will not receive a lump sum, but rather see a 50 cent per hour increase in your paycheck.

[FrenchieCat]

16. Can you point to this proposal of forwarding Stimulus checks that you are speaking of?

I don't seem to be able to find it.

I did hear that the Middle Tax Cut that Obama has been promising since he's been running
"May" to come in the form of Reduced payroll taxes, i.e., there will be no stimulus checks sent.

In addition, those who are self employed could reduce their Quarterly Payments for estimated taxes by whatever the tax cut amount would be, i.e., $500.00 for individuals ($1,000 for couples).

Those workers who normally earn too low of a figure to have income tax withholdings, would instead receive the tax cut via an increase in their paycheck that would be their portion of their increased EIC.

Further, I believe that Obama "may" be proposing that the employer simply withholds less payroll taxes from our checks each pay period.

The reason of choosing this method of providing tax cuts (as promised) to middle and low wage earners is that the amount one would benefit from is too small (not a lump sum) small to save, but large enough so that Americans would add the additional amount to their monthly budget, and plan accordingly. It actually represents a 50 Cent per hour take-home pay increase, and most of it should find itself back into the economy due to whom the tax cuts are aimed at.

A Stimulus would only be created IF the tax cuts are put back into the economy. The reason economist say that tax rebate checks don't work is because they are received in a larger lump sum large enough to save or invest. Also, because everyone reporting earned income got a Bush tax rebate, regardless of income, it resulted in a large portion of the Bush rebates going to those who didn't need it. Obama's tax cut plan is not aimed at anyone making over $200,000, and in fact, there is talk that this ceiling "May" be dropped to lower wage earning families than those earning $200,000 (Obama had mentioned $150,000).

I would add that Unemployment benefits "may" be extended for an additional 13 weeks, for those who do not have a job at all, and Unemployment benefits would not be taxable by the feds, period.....as they have been in the past.

Retirees "may" also benefit from the tax cut, by increasing the ceiling as to when SS benefit payments become taxable. Currently the ceiling is a senior has taxable income up to $25,000...which "may" be proposed to be increased to $50,000 instead.

I also believe that it "may" be proposed for seniors not to be forced to take money out of their 401K if the do not wish (due to the value dropping dramatically), but if they so choose to withdraw the money (because they need it), it will not be taxed up to the amount that would normally be "forced".

There are also Small business tax incentives that "may" be included...but I won't get into that, since it isn't what you are talking about.

[question everything]

36. Thank you for a comprehensive presentation

No, I cannot point to anything specific mainly because it appears that the plans continue to change as I can see also from the many "may" that you inserted.

Yes, I agree with you that any stimulus has to be structures so that most of it goes back into the economy and paying debt or saving does not do this.

I remember Bush's stimulus checks from the summer of 2001, before 9/11, when he so cavalierly raided the surplus that Clinton left. He came to town to meet with small business owners and at least one couple admitted to the reporter that the tax cut they received was used to purchase additional equipment, not to hire anyone.

[truebrit71]

18. Speak for yourself....I want mine thank you very much, the bigger the better...

...I am TIRED of the rich getting all the breaks....