Second Stimulus Package
Back in June, Democrat Presidential nominee Barack Obama suggested that a second stimulus check was necessary. I wrote about it because this was hot on the heels of the first stimulus check and it appeared as though Obama was catering to the masses. In reality, he was running point on a proposal House Democrats were pushing because so many of their proposals were left out of the first stimulus package.
With the credit freeze only now thawing, with both consumer borrowing and spending down, and with the prospects of a weak retail holiday season and rising unemployment, a second stimulus package designed to give our economy a shot in the arm looks pretty appealing now. Even Fed Chairman Ben Bernanke, in testimony given before the House Budget Committee, endorsed the idea of a stimulus package. More importantly, the White House said it would consider additional spending measures; it’s not an all-out endorsement of a second package but it’s better than flat out rejection.
Before anyone gets all giddy, most experts are saying nothing would happen until after the November 4th election. As it stands, most reports are saying that most of the proposals being pushed for the second stimulus package involved measures that were dropped from the first stimulus package. Those proposals included infrastructure improvements and extension of unemployment benefits & food stamps, all told costing about $150 billion or more.
Specifically, Speaker Pelosi wants to bring back a $61 billion House-passed bill:
- $37 billion in public works spending (infrastructure)
- $6 billion for jobless benefits (unemployment)
- $15 billion to help states pay for Medicaid bills
- $3 billion in food stamp assistance
- A stimulus check (tax rebate) of some kind, though no details
I am not a fan of the “stimulus check” concept (is it really spending if we are just borrowing from the future?) and I don’t see how all the other spending is going to stimulate the economy (it’s said that the public works spending could be implemented very quickly, thus producing jobs… but it’s public works, that just sounds like it would take a long time). Jobless benefits and food stamp assistance will lessen the pain but they don’t stimulate the economy. Finally, in most states you already get twenty-six weeks of unemployment, that’s six months, isn’t that fair?
I guess we’ll have to see what gets proposed.
(Photo: Sam Turner)
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Tags: 2008 Tax Stimulus Package, Barack Obama
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Hey, what’s another $61 billion? Funny thing is, they could’ve paid for this bill and had money to spare if they hadn’t stuffed the $700B bailout with another $100B+ of pork.
The idea is based on Keynesian Economics - a full exploration of the subject can be found via wikipedia but here is an excerpt (the link is included so I don’t hit your spam blockers):
Keynes argued that the solution to depression was to stimulate the economy (”inducement to invest”) through some combination of two approaches :
- a reduction in interest rates.
- Government investment in infrastructure - the injection of income results in more spending in the general economy, which in turn stimulates more production and investment involving still more income and spending and so forth. The initial stimulation starts a cascade of events, whose total increase in economic activity is a multiple of the original investment
You highlight why you understand public works moving its way through the economy; a stim check and food stamps would do the same thing (theoritically speaking of course).
I am a supporter of fiscal stimulus to drive growth, but the government has got so many initiatives on hand with a seemingly myopic view that I question how many of these programs will actually work. For example an earlier direct to consumer $50 billion stimulus package, provided a lift to consumer spending of 0.4 percent in May, but dried up after that. Similarly the 2008 housing relief bill did not save the housing market or GSE’s - Freddie and Fannie. Despite being politically popular, both examples of fiscal action failed miserably. With the floodgates of government spending opened, it is likely that our financial chiefs and lawmakers will keep on coming back for more. We are essentially spending away our futures to save the political and financial backsides of those people who got us into this mess in the first place. When are we going to have a real long term economic plan!
Of all the proposals, putting money into infrastructure makes the most sense. Our infrastructure is deteriorating (or deteriorated in many places) and bad infrastructure hurts business and the economy overall. The additional jobs would get people working and give them money to spend, boosting the economy further.
Other than that, the rest won’t do much, and another stimulus check would be essentially pointless.
I think another stimulus check is a mistake. The government doesn’t want to admit that we are in a recession, and so they’re using this technicality to get around it. If they can stimulate the economy every other quarter, then there won’t be two quarters of negative growth, and thus, no recession. At least, technically speaking.
I’d be fine with the infrastructure as that can quickly create jobs and such, but the fiscally responsible thing to do would be to look at budget cuts in other areas that don’t tie directly to the economy versus just adding it onto the already out of control national debt.
@Andy:
My belief is that the first stimulus plan actually hastened the fall of Fannie Mae and Freddie Mac. Everyone was so gung ho over their $600 checks that most people overlooked another provision of the bill. It increased the amount of “conforming loans” from $417K to about $750K. Thus, it forced these GSEs, who were already facing a cash crunch, to outlay even more cash to buy these larger mortgages. Not only this, now every failed loan would cost the GSEs even more money, due to their larger size.
It’s just another example of one part of government working against another part. This is why I advocate a much smaller government, one that isn’t so involved in every bit of the market.
That said, I do generally supprt increased government expenditures in infrastructure. This is one area that I do believe government should be involved in. Due to lack of funding, our roads, bridges, water, sewer, and other infrastructure is simply falling apart. Meanwhile, countries like China are rapidly catching up with us, and in certain aspects are even surpassing us. Just look at China’s new Beijing airport terminal. Stuff like that shows how China is rapidly moving towards surpassing us as a world superpower.
This has nothing to do with the second stimulus check or anything but the last paragraph of your article.
Have you ever looked into the actual unemployment benefits? It isn’t like you get 6 months of your salary. When my spouse was unemployed, before taxes his benefit (the maximum in the state we lived in at the time) was $300/week. This was 7 years ago now, so the benefit now is probably higher but even so, it wasn’t like he got paid what he was earning before (or, even half of what he was earning before) for 6 months to look for a new job.
It is good there is something but I wouldn’t call it good insurance against being unemployed for a short time.
I favor the infrastructure investment but I’m biased, I’m the engineer that designs your roads and mass transit and would directly benefit. It’s true our infrastructure is in terrible shape and we will have to pay to fix it at some point, why not go ahead and do it.
Yes, I am for the second-stimulus package. I am a family of 4 and my husband has been laid of from Sheetmetal Union, because there is no work, and I have been cut to 32 hours a week at my job.
Whoever made the comment about collecting 6 months of unemployment, yes your right, you do get 6 months. Your weekly benefits in Illinois is half of what you would make at your job and after the 6 months if there still is no work due to recession, then how are we suppose to support our families? Buy food, pay bills, etc. Please answer that for me since you think the way unemployment is set up now, that is fair?
@Michelle:
Find a job in a different industry.
Move to a different location where there are jobs.
Create your own job. Start a business. Become an entrepreneur.
There are a number of options. But it takes work. You can’t expect work to fall in your lap. You have to look for it, work for it. That’s why it’s called work.
right on rick.
i am sick of everyone thinking they deserve a hand out. Americans are becoming entirely too reliant on the government.
don’t put all of your eggs in one basket, including your career. have a backup plan/side income at all times. you are foolish if you have fixed expenses that you cannot cover if you are suddenly faced with hardship.
6 months is long enough to find a job. if you cannot find a similar job to what you held previously, take something a little less so that you can still put some bread on the table. if you cant scrounge up a few dollars an hour after searching for 6 months, it may be time to find a new place to live.
worse case, sell your possessions and buy only necessities. by the way, the internet is not a necessity. there is the first expense you can cut.
I’ve sat here and read all of the comments and all have their points. We all have our opinions based on our experiences.
Michelle I understand you:I agree with the stimulus checks, I was unemployed for 7 months. Was I looking for a job? Yes. There was nothing out there,( I had to go through a temp agency, took a month for them to find me something. I was giving a list of other temp agencies to go to and phone numbers were disconnected and 3 were not taking any applications.) I am mother with two children and a finance who’s work got cut from 40 hours to 20. Now I am currently working through the temp agency and the company that I am at is cutting hours and have gotten rid of 4 other temps due to the economy.
Bryan: sure the internet is an unnecessary expense but that’s what helped me look for a job. (considering the majority of companies you have to apply by internet.) If you sell your possessions (that money will only last for so long and then you will have nothing!!!)
Rick in order to accomplish the things you mentioned you have to have money or good credit or money for gas. All of that is hard to have if you not working and have a family.
Needless, to say something needs to be done, that will help those who are in need at the economy in the end!!!
it is not our fault that the government screwed up. i will accept any finances that the government offers to give me - that’s called survival. i need to pay my rent and buy food.
the only one who can clean up this financial mess is Barack Obama because he truly cares and want to make things better for us. i hope the security guards are staying close to his side to protect him. i need him to show me a better world - people coming together - for a good cause -themselves.
If you think that we are heading for a better world you are surely mistaken.What other signs does the world need to see that the good lord is coming.There are to many innocent people suffering out there.
I am christian, but,
“What other signs does the world need to see that the good lord is coming.There are to many innocent people suffering out there”
Was WWII not enough suffering for the second coming? You think this is it?
If they could see the big picture of how many families are going through and crooked the governments are then this world would be a better place.
The more money they tell us we are going to recieve the more problems we will have later. We need the next president to be a man that is fearless and yet have a good heart.
I was wondering are we really getting another stimulus package and when Now that Nov. 4th is over time for congress to deside are we or aren’t we getting this check I’m a single mother and I could use this money to pay my bils and what ever is left over I will use wisely.
Look! We all suffer from all this crap. You tell me why we have to cut this and that and live like caveman again. STOP funding a war that we shouldn’t even be fighting. 10 billion a month! Am I the only one that finds this mind boggling. Were losing jobs,homes and everything else. Why must we lose good men and women as well? Get the hell out of there and spend the money where it belongs rebuilding the USA not some other country that doesn’t appreciate anything. Let them keep their oil. Let them eat their oil while their at it. Quit feeding them and focus on our starving and homeless. God bless america just doesn’t have the same meaning anymore to me!!!
You can tell the ones who have not been effected by this whole ordeal. They have the biggest problem with the second stimulus check and i see absolutely nothing wrong with it. Consider yourself blessed if you have not been affected by this screwed up job bush have done on the middle class and poor. At the end of the day money will have no value and we will be living off faith and love. Everyone is so selfish and angry to the point we dont and wont help one another. God has a plan where all the selfish rich people will be throwing there money in the streets to try and save their self and it wont save them. Our government done this and I respect obama to the fullest for steping up to try and fix this mess. That was apart of the rich folks plan to have us living under these conditions until god blessed with obama. People should realize this by now the devil can not do anything with out our father permission. If you never had faith in jesus before you need him now, that is the only way to survival and in the gates of heaven. People please realize this life wasnt meant to be forever and its not much left here for us. The fight isnt ours to fight its between god and the devil we need to be postive instead of being so negative. All the lord wants from us is to have and keep our faith only in him. Remember stress messes with us mentally, physically and emotionally lets over come this together and stick together rather this drought affected some of us or not. Yes, bush and our goverment has done the devil work but if they repent our father will forgive them so why cant we. God bless everyone
Thank god for another stimulate check.
if we do get a second stimulus check how much do you think the check will be
I Will Take A Second Stimulus Check, And I Just Bet You Would Too……
I think we should get another stimulus check god knows we need it .God Bless!
Im so sick of people sayn there are jobs out there i live in the Elkhart IN area and there are 20% jobs here at least that are taking apps… Where i work is not that slow but is getting slower by the months you would be shocked how many people are there everyday puting in apps.. This is the RV capital of the world and we have had one of the largest hits of all. Its so easy to say move and cut spending sorry my wife and I dont do ANY xtra and we are still short on our bills the only thing we have xtra is Internet yes maybe we dont need it but its one thing if not the only thing we do that cost money…I think another stimulus check is a good thing. There is not a month that passes that we dont worry about where we are going to get our food from or how we are going to pay for our home…Yes everything happends for a reason and i do put My life in gods hands .
I just hope something happeds fast so we can feel like we can breath again
Durring the 2008 Election . I heard very little mentioned about helping the Poor.. I have worked consistantly all my life. And paid Taxes. However do to many health problems, I can no longer work. And I and fighting a loseing battle to get disability.. I recently learned I have colon cancer.. I could have really used the last stimulus check.. But didn’t qualify. And don’t expect to qualify if their is a Second one.. I am still an American.. But don’t feel like I have been treated like one…
6 months enoough to look for a job. I am an educated woman in my early 30’s. I have certifications in the MR field. That is great if i could find a job that is not 30-45 miles away. ( gas prices, vehicle repairs, winter driving) to say the least. I have been offered a job in my field but i would have to stay at my job for 48 hours at a stretch…I have children, what am i supposed to do with them. My husband works nights already. I have applied at every local store, pizza place, restaurant, shoe mills)etc. in a 20 mile radius. They have consistently hired teenages over me. And how r u supposed to open your own business when no one is buying anything, much less services.( childcare, housekeeping, in home care). So yes an unemployment extension would help until the economy comes back around, or our jobs stop being sent overseas. It is time to rebuild america, not china.
And in response to the gentleman who said that we should sell off our belongings to survive., sell what, my kitchen table. Or maybe my vehicle. I have a computer that i bought back when i was working, before i got laid off, it is so outdated i might get 100.00 for parts. Don’t judge or expect that everyone is just out their for a handout, waiting for a job or money to fall in their laps. But remember that I like you are just trying to do the best for my family and children in an uncertain economy. This is not a third world country and our children should not have to live like it is.
A SECOND STIMULAS CHECK WOULD BE GREAT! MY HUSBAND AND I BOTH WORK EVERY DAY AND STILL HAVE TO STRUGGLE TO MAKE ENDS MET. NOT EVERYONE IN THE US IS BLESSED WITH HAVING MONEY OR SOMEONE IN THEIR FAMILY PASSING AND LEAVING THEM WITH MONEY.
FOR THE PEOPLE THAT WORK EVERY DAY AND STILL HAVE TO STRUGGLE TO TAKE CARE OF THEIR FAMILIES AND NOT SITTING ON A NEST ESGG NEED HELP!!!
the idea of adding weeks to unemployment is great for workers who cant find jobs…but how about increasing limits on checks with the rate of inflation. I collected 18 years ago in maine and the check was 198.00..in that time it has increased a mere 8.00 per year…what a joke…i realize something is better than nothing and we’re grateful to have it but how does one live on this?
I WORK EVERYDAY ANDI NEVER HAVE ANY MONEY LEFT OVER TO BY ME SOMETHING NICE IT’S EITHER BUY FOOD OR PAY YOUR UTILITIE BILL WHICH I THINK IS A BIG RIP OFF SO A STIMULUS CHECK HELPS ME A LOT AND I WOULD LIKE TO SEE THE AMERICAN PEOPLE BE BAILED OUT INSTEAD OF BIG GREEDY BANKS BEING BAILED OUT WHO GOT THEM SELVES IN THIS SITUATION IN THE FIRST PLACE HELP THE ONES WHO WANTS TO HELP THEMSELVES PLEASE THANK YOU
Hey Rick it costs money to move. I just moved twice within 1 year and its very expensive so if your already without a job how do you think someone could manage that especially if you have children? I’m curious.
I’m with the stimulus check, see, if we didn’t have big government and they had not forced all this modernization onto the American people, we would have plenty of land to grow things, and plenty of forest to hunt. We wouldn’t have to have 9-5 jobs that don’t pay the rent. We could just move if things got bad, we could just work harder if we needed more. Things are the way they are because of people’s greed. I have never been greedy a day in my life, I was raised upper middle class America, and I have an education. However, me and my husband, just make ends meet, and can grab the unexpected expenses in a while….We could take care of our family if we weren’t in a modern world, however, the government says our children have to be in schools…..if it weren’t for this, and all the modernization of our landscape there would be no problem. So yes, a government that messed my life up before I was even born does owe me something.
I was laid off in Feb from a job I had for 5 years. I have 2 children, one of whom is autistic and was on SSI. In addition to losing my insurance along with my job, my son lost his SSI because although my income was less than half, it was “unearned” and so counted differently. My insulin costs $200 a WEEK…that doesn’t include other meds.
I’ve always prided myself on being very frugal. We cook at home 6 nights a week, no leftovers are ever wasted, lunch was always a brown bag. My coworkers used to laugh. When I bought my house 6 years ago I bought WELL within my means.
“Luckily” I was found to be diabled by the SSA within 2 months of my app and started gettingpayments 5 months after my work ended. Meanwhile, my retirement fund is gone, my kids have no insurance, and my husband finally found a job but of course no bens there either.
If anyone out there is too proud to take a stimulus check should the govt send one, email me - I promise to put it to good use.
PS We haven’t owned a car we had to pay on in 15 years. We live on a cash basis. This is probably why I didn’t lose my house.
I think it is so funny, that the wealthy need help from the Goverment, and the middle class suffer. I will take my stimulus check and why should you care were the money goes, its not coming from you……
well this is what i say about another stimulus check please send one we need it very much but i hav,ent hard anything about it sence his first talk about it it,s like he,s forgot about it.sometimes i think it was just talk will see.i hope he,s don,t lie like the others just too get in.
I think putting more money to the state medicaid programs is a MISTAKE! The medicaid programs need to be more strict on who they let on. I understand that there are people out there that need help, but I get SO tired of seeing people live off the state. I don’t think women who sit at home having babies every year and don’t know how to get a job should get medicaid. I’m sorry, but I don’t. I don’t think illegal immigrants should be eligible for medicaid. If they can’t go through the legal process to be an american, then why should the US tax payers be spending money to pay for their healthcare? That’s bull. Medicaid was made to help struggling familes who’s children, and some adults, who can’t afford healthcare can get help. It was not meant for losers who don’t want to get a job or follow the rules.
I don’t think the stimulus checks are a good idea either. As much as I would love to get another $600 check sent to my mailbox, I know that it is just a waste of time and money. The government needs to focus on things that will actually help the economy. And if they do decide to send out those checks, I don’t think everyone should get one. I think they should be limited to low & middle-class WORKING americans. If you’re living off the state and don’t want to get a job, then why should the government give you any more money. The people who deserve that free money are the people who are trying to make ends meet and just can’t seem to get there.
I am not tired nor upset with anyone. People have a right to an opinion, but i feel no one should complain about anything. Yes, there are women not working and having babies. Yes, people could move to a diffrent place to find jobs. Yes, people are crossing the american border. So what. That is not why the economy is decimtaed. We as a people have to learn and understand that our lives are temporary, why are you worried about what someone else in a different city is doing. Why are you being selfish for other people. You might not live to see tomorrow. Stop Complaining and troubling yourself with what americans are doing in their spare time. Live the life you have left and enjoy. Be Joyous and let God take care of what we won’ let Him.
Before you throw insults and ignorant hateful words around- try putting yourself in others shoes and walking around for a bit.
single Mom supporting a special needs child…barely making ends meet. Sometimes there are no easy fix answers- you MAY think there is, but when you get down to it- it just doesn’t work. Keep your chin up and keep smiling! :o) Tomorrow is a new day. Be nice to yourself and others.
Merry Christmas everyone and I sure HOPE we DO get a 2nd Stimulus Check.
If all else fails, keep some humor. “…Smile and wave boys….smile and wave…”
I hope the government will make the right choices to send out a second stimulus check I am a single mother and I am trying my best to make my money last but they really do need to send them out it would help alot of people. Everyone work really hard to make end meat and the American People need the government to be smart and send out a second check. Merry Christmas to all and I hope we all have A great new years
I think that everyone who is saying that a second stimulus is a mistake is not being honest. I put everything that I own on it. Yeah, they say that, but as soon as they get it they will go and spend it and that is the truth and they know it. There are some people who did not get a stimulus because they did not qualify for it and they are just mad that they did not get one and that is why they are saying that they think that a second stimulus is a mistake. I think that it is a great idea and I feel that it will help this country and they all know it. Stop lying you all who say that they think that it is a mistake is not being honest. That is my opinion and I don’t care this is how I feel.
Well Im All for a second stimulis check because we are really struggling and that would really be a help to some families who are barely making it .
i wish we would hurry up and hear when we are going to recieve the stimalas check i am in debt up to my ears i wonder how much it is going to be and if my family quailifies.
don’t feel bad i don’t even have a home,apt. i live in my sisters driveway theres no room at the inn. have no job temporary services can’t even find me a job
Well, I believe that the purpose of the stimulus checks are to help “stimulate” the economy, but what is the point in that if when there are people out there such as myself who have been unemployed and are in debt? If I can speak for myself, the check will be going towards debt. Now how is that stimulating the economy? So to me there are pros and cons….. but I sure cant wait to get it in the mail and hopefully it will be more than $600 this time!!!!