Economic Stimulus

I think everyone knows the economy is in trouble and has been for a long time. Anyone can take a quick glance at their 401k and come to that conclusion pretty easily. Last year, before the financial meltdown, a tax rebate stimulus program was implemented. Our family got $1500. While it was a nice jolt, we immediately spent it just as we were requested to do. We bought new trees for our yard and helped pay down our credit card bill. Didn't save a single penny of it. I'm sure most typical Americans did the same thing. They spent it. Did it make a difference? Personally, I don't think so. And then, through the year, gas reached an all-time high, the housing market collapsed, the banking industry collapsed, the automotive industry collapsed, and things looked pretty bleak. Our personal wealth (401k values) dropped about 40%. In fact, I'm guessing many Americans were wishing they had kept their tax rebate checks instead of spending them to try and stimulate a losing battle.

Now, with the new Obama administration in office, they are coming up with a new economic stimulus plan, which will cost another trillion dollars. Part of the plan includes another tax cut for the working class, with substantial spending on infrastructure, which will hopefully lead to new jobs. The tax rebate they are putting into place would call for a $500 credit per person, but there has been some debate on how it would be implemented. Some were looking for a through-the-year approach with about $20 more in your paycheck each payday. Big deal. That will do absolutely nothing to help stimulate the economy. A lump sum payment didn't work last year, and it's not going to work this year. In fact, I would banter that some people may save a lump sum payment for a rainy day, since we're in what can be likened to a monsoon.

$500 is a pittance in the grand scheme. Why not make it $5000? Why not make it $10000? Why not make the ballooning cost of this program 2 trillion instead of 1? The country needs a huge jolt. $500 spread out over 26 pay periods will do ABSOLUTELY nothing to help improve a bleak, somewhat hopeless situation! That's just my opinion. I'm not an economist, nor do I play one on TV. I just know how it would affect my bottom line, and the ultimate conclusion is that it wouldn't.