Tuesday, March 25, 2008

So How Are You Spending YOUR Stimulus Check?

Unless you have been living under a rock, you probably already know that the IRS will be doling out tax rebates as part of Bush's $152 billion economic stimulus package signed into law last month, which hopes to stave off recession amid a deepening housing and credit market crisis. (psst... why doesn't his administration just lower taxes and stop printing and spending gobs of money !!)

The stimulus rebate amounts to about $600 for most middle-income individuals and $1,200 for middle-income couples. Taxpayers must file a 2007 IRS tax return to receive a payment. You also must have a Social Security number and at least $3,000 in qualifying income.

The IRS has published a handy dandy online calculator to help taxpayers determine if they are eligible. Here is another version as well.

Payments will be mailed out on May 2 and continue through July - and if your social security number ends in a low number you'll be getting yours first.

But back to my original question - How will YOU be spending your check?
Go to Walmart and essentially send your check to China?
Spend it on gasoline - and send your money to Venezuela or the Middle East?
Buy a car and send your money to Japan or Germany?
How about buying some fruits and vegetables imported from Mexico or Chile?

It appears that the reality is that few American jobs will actually be created by this plan. The money being rebated won't even help those on the brink of foreclosure on their mortgage because it probably won't even cover one mortgage payment. In truth we manufacture many fewer products here in the USA these days. Even many food products in our supermarkets are being imported. Such is the effect of globalization. Globalization, whose merits can argued either as good or bad, has made it so whatever you purchase doesn't necessarily help out the American economy. So the question remains: how is buying foreign goods with your rebate check supposed to help stimulate the U.S. economy? Many argue that our national debt will increase substantially because of this stimulus package and that when we turn around and buy foreign goods with the money we will only be increasing our trade deficit.

Maybe it really is more of a psychological effect - you know that you receive an nice check in the mail, for essentially just filing a tax return,having a social security number and meeting some income requirements. It isn't even really free money because you're basically getting your own money back.

But anyway, for those not planning to spend it on "stuff" here are some other options.
Some people plan to pay off debt - that's a good idea any way you look at it.
Some people plan to save it or invest it - but then again that doesn't necessarily stimulate the economy.
Some people will use it to pay their state tax.
Some people will donate it to charity.

I'm not sure what I'll do with it - I guess I'll buy something that will increase in value as we head into an inflationary period; like gold or silver.


Charley said...

"It isn't even really free money because you're basically getting your own money back."

Not me. I'm one of the people to whose head the government pointed a gun and demanded money so that it could give it to the rest of the populace. This is income redistribution, pure and simple...and certainly NOT something of which the Founders would have approved.

Whenever someone excitedly brings up the subject and asks me about it, I respond that they really should at least be saying, "Thank you" since it is my money they are receiving....

Disgusted at BOTH parties....


Lisa G. said...

Paying off the credit card and putting the rest in savings. That's being a good American, right? :)

Blueberry said...

We'll be putting it toward getting our sewer line replaced. WooHoo! A problem that surfaced the first week we moved into this house, and has been a pain in there rear every since, literally.

Talk about flushing our money away! LOL

Actually, getting this fixed is the best thing we could do because we won't be able to sell the house at a decent price unless it's fixed. Not that we're planning on moving anytime soon, but just in case.

I think I'll paint my kitchen and schoolroom too:-)

Eric Holcombe said...

You are all too late. The Treasury and the Federal Reserve Cartel already spent most of it:


That's a mere $100 or so per capita. Can we claim a charitable contribution on our 1040s?

Amanda Elend said...


I'm working over at MobLogic, and we have a show today about the economic stimulus package. Thought you might be interested.

The whole idea of the package kind of made our host, Lindsay Campbell, angry. In today's show, she tries to start a saving/loan-paying revolution.

Stop by, let us know what you think. We'd love to hear your opinion.

Amanda Elend

Rational Jenn said...

I don't know what we'll do with ours. I have read (but not verified) that it cost the government $42 million just to send out the stimulus notice. Talk about wasteful!

Not to mention, I always find it ironic, these stimulus packages, because the government, by calling it a stimulus package, explicitly acknowledges that money in the hands of the citizens stimulates the economy.

So the years in which we don't get an extra kickback could be viewed as the taxpayers "receiving" an "economic stagnation package."

Elisheva Hannah Levin said...

Like Charley, we won't be getting a check. With just dh working and me at home, we "make too much money." So good old Uncle Sam is going to take some of ours away to give to you.

The amazing thing is that we own our house, and yet as gas prices have risen, we have cut back some discretionary spending. In other words, we are not actually wealthy, but more like middle class--our income does not break six figures.

So we are the "rich" that Hillary wants to soak. I imagine the really rich people have ways to protect themselves from taxes. Sigh.

Anonymous said...

The awake Americans are not paying their taxes at all this year,and are joining the great tax revolt. Google it. Anyone who willingly participates in the IRS scam is a fool. The federal income tax, legal or not is a fraud because the dollar is the creature of the Federal Reserve; a private bank whose only aim is to enrich its shareholders. Every time you pay the income tax, you reinforce the fraud. This cash giveaway is just the latest in an series of increasingly outrageous thefts (the Bear Stearns bailout being another) that the sucker American public is shelling out for. Shame on you all. Ben Franklin Is spinning in his grave.

Eric Holcombe said...

Federal Reserve Cartel blows the rest of it:


But taking the crappy unpaid mortgages as collateral for a .3% interest rate loan isn't a "bailout"....is it?

viccarion said...

While filing your tax returns, beware of IRS scams. Don't trust anyone if they tell you they are from the IRS, remember, the IRS uses regular U.S. mail!