Obama’s Emergency Economic Plan Released: Second Stimulus Check & Growth Funds

Barack Obama at St. Paul 2008In early June, Democratic Presidential hopeful Barack Obama’s mentioned a need for another stimulus check. Then, in late July, there were rumblings in Congress that Democrats were looking to put together another stimulus package that may or may not include a check to families. There was a move by Democrats to try to pass the aspects of the first stimulus package, which included a check, that were struck down in the name of expediency.

Senator Obama released this six-page policy paper that outlines a two-part stimulus package.

Part 1: Emergency Energy Rebate Checks: The first part would include an “emergency energy rebate.” Individuals would receive $500 and married couples would receive $1000. The checks would be paid for over five years by a windfall tax on oil company profits. The six-page document explains the nature of the checks but doesn’t illustrate how the windfall profits might be taxed (granted, given the political nature of the document, it might be out of scope).

Part 2: $25B State Growth Fund & $25B Jobs and Growth Fund. The second part has itself two parts. The State Growth Fund would help prevent state and local cuts in services like education and housing assistance as well as alleviate the need to increase taxes, tolls, and fees. Many states are feeling the pinch as housing prices fall, foreclosures rise, and real estate tax revenue falling. The Jobs and Growth Fund is really an infrastructure bill that would support maintenance of highways, roads, and bridges; as well as fast-track school repair projects. There is no mention of how this would be funded.

My Thoughts: I didn’t like the stimulus checks but having listened to their use in the 70s in Greenspan’s anecdotal Age of Turbulence, I’m not wholly against them as a mechanism for thwarting an economic slowdown. However, it’s becoming increasingly evident that the checks are as much about politics as they are about prevent a slowdown. While I would imagine the economic policy advisors on Obama’s staff are well versed in macr- and microeconomics, I wonder how much of it is influenced by a desire to win in November.

That being said, people are getting pinched. Not everyone is getting pinched, but a lot of people are and additional funds would help some remain solvent. My concern is that with a deficit nearing half a trillion dollars, we’re sacrificing our future prosperity for relief today. This is exactly the same thinking that gets many people into deep credit card debt. “Just a little more relief…”

Finally, what are the chances this actually happens? Democrats had difficulty extending unemployment benefits and those go only to those who have already lost their jobs. You can argue that some people getting the first stimulus checks didn’t need them, but unemployment benefits only go to those who are unemployed! It’s difficult to say if this plan would even fly, but it makes for an interesting discussion. So, what do you think? 🙂

(Photo: chadwho1ders)


Best Gasoline Station Has Best Gas?

Old Fashioned Gas PumpIn the current world of $4 a gallon gasoline, everyone is looking for an edge. Whether it’s additives that don’t really work or little gadgets that don’t really work, we’re looking for anything that will squeeze out a couple more MPG from the car we already have.

The next logical step is to ask whether the gas at various gas station companies makes a difference. For the longest time, I believed that the gas from Exxon was better than the gas from Costco. I did empirical studies where I saved my gas pump receipts and calculated my average MPG and the Exxon gas did give me 2-3 MPG extra. However, after further research, I believe that my driving behavior and routes had a greater effect on fuel efficiency than the label on the pump.

The gas from one company is essentially identical to the gas from another.

Government law requires that all gasoline certain detergents that help prevent fuel injectors from clogging. This means that all the fancy brand name gas stations and their fancy “additives” are all required and that all gas contains them. Some say that the detergents from brand name companies go above and beyond but my perspective is that you only want the minimum standard, which is required of all gasoline. Why do you want more detergent than you really need? I don’t want more detergent in my gasoline, I want as little as possible because that gives me more gasoline! (I’m only kidding, the added volume in detergent is tiny)

Many gas brands share pipelines. According to a Smart Money article on what Gas Stations Won’t Tell You, Chevron gas stations might sell gas refined by another company like Shell or Exxon Mobil, with the difference between their gas being a quart of detergent added to an 8,000 gallon tanker truck! After a little digging, I found these maps of pipelines in the US and there aren’t that many pipelines. There are certainly as many pipelines as there are gas brands, so the fact that they mix and match isn’t that surprising.

If there was a difference, we’d know about it by now. The power of the free markets is very strong, if a particular brand of gasoline was definitely superior, we’d know. We’d know because it would be more expensive because the higher performance would justify the higher cost. Since there isn’t a brand that exists with significantly superior performance at a higher price, it’s clear that they’re all pretty much the same (and these brands have been around for decades).

If you really want to make a difference, you can save more money by buying the cheaper gas and then adding a fuel injector cleaner with every oil change. I’ve used many a fuel injector cleaners, which you can find in any auto parts store, but can’t really say I can tell. The mechanic friends of mine say that while it can’t hurt, don’t bother getting expensive cleaner, just get the cheap stuff.

Oh, another tip, don’t buy higher octane than you need, it’s a waste of money.

(Photo: ella_marie)


How to Max Out Credit Card Rewards

With the price of food and gas where it is, everyone’s looking for an edge and for more and more people, myself included, that edge is in maximizing what you can get out of credit card cash back reward programs. Credit card companies charge vendors a hefty percentage to process credit card transactions (AMEX and Discover charge the most, that’s why they often have the best cashback programs), so doesn’t it make sense that they pass along some of that to you? Of course it does!

So here are eight tips I use to ensure I get the most cash back out of credit cards, hopefully you will find them useful as well.

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 Personal Finance, Retirement 

WIN: Oil Oil Everywhere, Not A Drop To Burn

4 gallons of gas per household per dayAccording to, the United States consumes about 400 million gallons of oil a day across 100 million households, or approximately 4 gallons per household per day. If you drive a 25 MPG car, that’s a hundred miles of driving a day. How does your household stack up? You using more or less than your four?

50 Billion Barrels of Oil under GreenlandIf we melt Greenland, we can get 50 billion barrels of oil. Actually, it’s already melting and oil companies already have oil exploration licenses to start poking around in Greenland. So, really we need to do nothing differently. Oh, and I heard penguins and polar bears make excellent soups so let’s melt the ice from under them too.

8485 GM Hybrid Cars Sold General Motors, as of the recent IRS report, has sold a mere 8,485 hybrid vehicles. By comparison, Toyota crushed the 60,000 limit and Honda just recently exceeded it. Ford is over halfway there. GM is, well, slightly slower out of the gate but remember the tortoise beat the hare.

$100,000 Cost of Tesla RoadsterThe Tesla Roadster is a fully electric car made by Tesla Motors. On a single charge, it can travel 220 miles with an efficient of a reported 4.7 mi/kW·h which is the equivalent of 135 MPG. $100,000 is the price of one of the Tesla’s “Signature One Hundred” in all its tricked out glory. Fortune just published an article yesterday about the Tesla.

Have a great weekend everyone!

 Your Take 

Your Take: Do You Carpool?

With gas around, or over depending on where you are, $4.00 a gallon for regular unleaded, are you car pooling more often? Here in Howard County, Maryland, the Park & Ride’s have been feeling the pains of more carpoolers as they rush to expand and meet the increased demand. On the whole, more people are car pooling but, at least amongst my friends, there hasn’t been a significant increase in the number of people sharing rides. Carpooling once a week is the quickest way save 20% on your gasoline bill (wrap your head around that amazing math!).

When I had a commute, I didn’t carpool with my wife. We could’ve, as I was only a minor detour, but we didn’t because of her hours (technically, it’s because of my laziness as you’ll see). Her commute takes about 35 minutes, mine was about 20, but she sometimes had to be in by around 7AM to meet with third shift. That meant she had to get on the road by at least 6:30AM. I wasn’t having any of that. The end of the day was sometimes even more unpredictable, sometimes she would be on the road by 6:00PM or 6:30PM. Sometimes she’d have to stay even later, it was simply too much work time for me… hence my mentioning it was really my laziness.

So, could we have carpooled? Yes, it’s not like we were in two totally different directions. We didn’t because I didn’t want to get up early and stay at the office so late. What’s your take on carpooling? Waste of time? Totally worth it?


Test Drove the Toyota Prius

Toyota PriusLast weekend, on July 4th no less, my wife and I stopped by our local Toyota dealership and test drove a Prius. Fortunately for us, neither one of us drives a gas guzzler (I drive a 2003 Toyota Celica and my wife drives a 2004 Honda Civic) and neither one of will need a replacement car for quite some time but with a day off and being in the neighborhood running errands, we figured stopping by would be a fun little diversion. Our friends from New York own a Prius, which they love, and we’ve ridden in it before, but never really “test drove,” complete with salesperson pointing out every last feature. Overall, we were impressed and it certainly would be on the short list of vehicles we’d consider if we were to replace either of our cars.

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Cost Benefit Analysis of GPS Units

Before talk of $4 gasoline (and airlines going bankrupt and charging you to check luggage) dominated the nation’s transportation attention, global positioning system units were all the rage. Now it sounds like GPS units have become more of a luxury good, something you only get it if you are hard pressed to spend your stimulus check (perhaps there’s a second stimulus check coming?). However, I argue that GPS units might be a good investment because it makes your driving more efficient (hopefully). Let’s see, shall we?

Fuel Cost Per Mile

If you drive a 30 mile per gallon car, $4 a gallon for gas means that each mile costs you approximately 13.3 cents. If your car only gets 20 miles per gallon, $4 gas equates to 20 cents a mile. This gives you a baseline for comparison, how many miles do you need to save in order to make one of those units “worth it?” We don’t consider other costs per mile, such as car depreciation and maintenance, because that would introduce far too many factors for our simplistic calculation. If you went through the exercise of calculating the cost per mile of your car, use that figure instead of 13.3/20 cents/mile as calculated above.

Breakeven Analysis

If you get the Magellan Maestro 3200 3.5-Inch Portable GPS Navigator for $131 at Amazon, the unit pays for itself if you can save 985 miles (at 30 MPG, 750 miles at 20 MPG) over the lifetime of the unit. If you assume that the lifespan of the unit is a conservative five years, that’s 197 miles a year, or, 1.31% if you drive 15,000 miles year.

Is it really possible to save 197 miles a year? I think that if you do a lot of driving in areas you don’t know very well, it’s very possible. The class of users that I believe benefit the most from GPS units are real estate agents. What about someone who drives the same commute every day five days a week? Chances are you won’t benefit greatly from a GPS on weekdays but you might benefit on the weekend. If your GPS has integrated traffic, which the 3200 doesn’t (I just picked the cheapest unit on Amazon at the time), you could save more by avoiding traffic trouble spots.

Or, for those who are fans of The Office, strict adherence to the units could leave your car in a lake (after the jump). 🙂

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Buy Costco Gas without Costco Membership

Costco Gas StationsCostco has since closed this loophole so you’ll need a Costco Membership to get gas there.

A friend of mine just tipped me off on this trick where you can buy gas at Costco without a Costco membership. All you have to do is swipe an American Express card first, when you would normally swipe your membership card, and then swipe it again for payment. Afterwards, it will let you buy the sweet sweet nectar of condensed dinosaur bones at rock bottom prices without the $50/year membership. It’s that simple.

Normally, you have to swipe your Costco Card or the American Express Costco TrueEarnings card in order to authenticate in their gas station systems. It appears that you can simply use any American Express card in the authentication phase because the American Express Costco TrueEarnings card is just an AMEX with a Costco bar code.

I’ve confirmed that this works in Maryland and others have reported success in other states (except those that require an attendant to pump your gas, like New Jersey and Oregon). Locate a Costco nearby (check to make sure it has a Gas Station) and give it a try, Costco gas is usually many cents cheaper than local competitors.

(Photo by shindohd)

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