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Information About A Possible 2009 Economic Stimulus Plan

By Erik Folgate

During the presidential election, Barack Obama spoke about proposing an economic stimulus plan for 2009. Originally, Obama and Congress wanted to get a stimulus plan passed during his lame duck period, but Congress is no longer in session until the beginning of the new year, so it looks like that isn’t happening. The Democrats wanted to get two stimulus packages passed, one by the end of this year, and then another one in the beginning of 2009. Now, it looks like they will push for one comprehensive stimulus plan in January or February of 2009.

When Did Democrats Start Talking About A Stimulus Plan?

Last summer, Obama saw high gas and energy prices, and he and his staff devised a plan to stimulate the economy. Part of his stimulus plan would have given up to $1,000 per family as an energy tax credit to offset the high gas prices families were paying. He planned to pay for the stimulus plan by implementing a windfall profits tax against oil companies. Now that gas prices are at about a $1.75 per gallon on a national average, I assume that he will revise the name of the tax credit and where he gets the money from.

Here are some more proposals Obama has made while on the campaign trail:

  1. Suspending penalties and income tax on early withdrawals from IRA and 401(k) accounts.
  2. Offering a temporary tax credit of $3,000 to companies for each new full-time employee hired in the United States.
  3. Extending unemployment benefits by a period of 13 weeks and temporarily suspending income taxes on those benefits.
  4. Requiring a 90-day moratorium on foreclosures for homeowners.

The most likely economic stimulus plan that Obama will try to pass as the new president is called a “make work pay” tax credit that will give $500 per person or $1,000 per family, which will provide a partial tax credit from social security tax. The second proposal which could be part of one big plan would be an extension of the earned income. This would provide more tax relief to lower income workers.

Do we need another economic stimulus plan?

I really don’t know how the government thinks that handing out all of this money is going to get us back to a good position. It’s the most backwards thinking I have ever seen. They’ve already pumped in $150 Billion this summer, $700 billion to financial institutions, probably another $15 billion to auto makers, and now more billions of dollars in the beginning of the year. If you want to stimulate the economy, let free markets run the course. The government has meddled so much in the free market that after it’s all said and done, it won’t be a free market. The government will have a stake in every private industry, because every private industry wants a handout. We don’t need handouts, we need education and personal growth. Going through tough times builds character and teaches us lessons. The only way for this economy to flourish again is for individuals to take control of their finances by eliminating unsecured debt, saving for emergencies, and increasing their income. The government will not bail us out of an economic crisis. Only we will bail ourselves out of an economic crisis.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • Dana Crawford

    y statement to am economic stimulus is that there should be another one. It would have been better to have done one in November to get things up and moving for the holiday season and with income tax payments in January and February the people would still be spending wich would keep money moving in the for at least 3 or months straight. Then more spending in July for the 4th and August and September for back to school and college as a retail worker I am able to see the months that buisness is good. I also think that single parent families should get a bigger out come married couples often have two incomes which still leaves the low income mother still trying to strive for the best for her children thank you for your time. -Dana

  • Tayrn

    Absolutely Dana! I am a single mother with ONE LOW income, trying to raise a 3 and a half year old autistic son. I’m currently on unemployment and unable to even look for work for lack of a babysitter and my son is at a clinic constantly and now speech therapy and other training. I do not have the time to work right now nor do I have a free babysitter, which is what I would need to do it. I could absolutely use the help. Call me low class southern welfare trash if you’d like, but right now, I need the money and couldn’t care less about what it does to our economy in the mean time. I’d be using it for gas to go back and forth to Detroit which is whre my sons doctors are. And I’d buy a few cases of diapers and some spring clothes for him….I CANNOT afford to live anymore. It’s sickening. But I guess that’s my own problem, nothing I can blame on the government, but i do really need the help nonetheless.

  • Corey

    I think these stimulus packages are the worse thing for our economy. We need to be conserving money and not allowing liberals to waste it. People need to start working and providing a life for themselves and not letting the government take care of them. More people need to be going to college/university and making something of themselves. I personally believe that the unemployment tax should be minimized to a very small amout; therefore, turning it into something that cannot be abused. If a person is capable and able to work, then they should be. Also, for mothers or fathers with small childern, there are grants that are given that will provide little or no cost childcare for working parents. If feel that with the government that was elected in November, the United States is in SERIOUS trouble!

  • Tina

    The United States government and everyone else that lives by it, shouldn’t be in any economic hurting. Why? You ask… well plain and simple. Who prints our currency? The United States. Make more. Our country shouldn’t have a HUGE display on our “national debt”. I believe that is just up there to make us feel better about going through the same thing. ALMOST every single American that is living on their own has a “debt” in one way or another. And what really gets me, is that a lot of people will complain about not getting anything from the government, then when they finally get their crap together and give it to us, we complain about that. Don’t take me wrong, I believe me, I’m not all “be nice to the government, they don’t mean any harm, blah blah blah”, I think we are very lucky Americans and I am most proud of it. But, it just seems like they are damned if they do, or damned if they don’t. Yes, we complain about the taxes we will have to pay on it next year, but I bet you were not complaining about that or even thinking about that when you had it direct deposited, or cashing it at your bank! As for the single mom and family amounts. I agree with Dana, definitely a single parents should get more due to one income instead of the family. Or at least make it that if you made a certain amount (single or family). Because their are families out there that have only one is working to provide for the whole family. Pretty much it will always be: The rich get richer, and the poor get poorer. Sometimes instead of passing out money, maybe pass out ways to clear debt. Pay off our credit and improve that score of ours! Some of need that to become financially better- I’m not talking about buying better things on credit, I’m talking about improving our lifestyle by buying and spending more and going back into debt, I’m talking a boost in a credit score with a couple things knocked off for those families struggling to move out of areas that are not safe for them nor their children. Ugh, that’s just a whole new complaint…. Thanks for your time!

  • Tina

    I’m not talking about buying better things on credit, I’m NOT talking about improving our lifestyle by buying and spending more and going back into debt,

  • Shayna

    I agree with Tina, do a one time payment to help people with debt, to get a better grip on our finances. With a cap of course. Then we are responsible to stay on top. Which in turn would stimulate our economy. Since we would be wise in our spending to stay out of debt. There is nothing wrong with helping people in need.

  • matt

    Print more money? are you serious? And what weaken the american dollar even more? I do agree to many americans are depending on the government to bail them out, and the last bail out did not help boost the economy. the problem stems all the way back from the bush sr administration. Jobs were being outsourced to other countries which allowed business owners to run a muck and take on cheap labor. However in doing so they lost millions of americans valuable jobs. I think the government should impose heavy taxes on companies that are outsourcing our jobs. Also the housing crisis which bill clinton and fannie mae had a big hand in creating did not help matters. The underprivliged should not have gotten loans without proving income, credit worthiness, and proof of assetts. Secondly it doesnt matter who is in office today or tommorow we are all to blame for our own greed and reckless descisions. Right now the government needs to let financial institutions bury there bad debts, and should lend funds to help carry the burden. But a stimulus plan for the american people will only cause people to pay there bills and not buy new products which in turn will ultimatley boost the economy.

  • Tammy

    Wow, what a tough conversation. Why should we as Americans have to struggle to make it or people die from illness because they don’t have insurance & can’t afford to go to the dr. If our money can pay for these politicians to live large, why are the people who are paying for this struggling just to keep food on the table or lights on or heat on? Yes, the government should help any person living in the United States with survival @ this time. The average american is not looking for a million dollar home & limos to drive them everywhere as the politicians are able to enjoy, they want to be able to feed their family or pay the gas bill. They want to be able to live. I agree, print some more damn money-quit bailing out companies that can’t survive after the bail out because your average american can’t afford to buy anything anyways. Give each house hold 1 million dollars-the economy would boom, we would pay our mortgages off-giving the banks money, we would pay off car notes-giving the big 3 money, we would spend more on home repairs-giving contractors money-saving jobs. Wow, it’s not that difficult- give the people money to pay debts & be able to put back in the economy! Quit letting people come to this country & not pay taxes for 10 years. Quit giving people who get assistance during the year $5-$6,000.00 tax returns-pay back the state with it for the help they got during the year. Quit paying politicians so much damn money. Make politicians stay in $49 a night hotels instead of $1000 night suites on their business trips, get rid of their private jets, cut their spending accounts for business purposes. I wonder what would be done for the average person if these politicians were made to live more reasonably as punishment until we see some change? There are many hard working honest americans out here who are struggling not because they are careless or lazy! We are in trouble & will be until some huge changes are made & careless spending by the “big wigs” is stopped. The average person needs help with child care, medical & the high utility bills, high credit card rates, we just need help getting out of the red & able to brake even. Why shouldn’t we get that? It’s not a difficult fix, it’s just a government controlled fix. Best luck to all of you-god bless.

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