Economic stimulus for everyone else: Washington considers $84 billion plan
Filed under: Economy
If you're one of the 0.057 percent of Americans -- roughly 175,000 out of 305 million -- who are in line for $140 billion in Wall Street bonuses this year, you may be wondering why the government is spending $787 billion of your hard-earned tax dollars for "economic stimulus." After all, your employers got their $23.7 trillion bailout for causing the financial crisis and everything is hunky-dory now. Your bosses spent $5 billion for lobbying in Washington over the last decade and got an ample return on that investment, so why not just pull up the stairs and take off?
But if you're among the 15.1 million unemployed or part of the other 99.943 percent of America who are not doing so well these days, you might feel that the government is not doing enough for you. While the administration claims that its stimulus plan has saved or created a million jobs so far, that is nowhere near enough. But more help from Washington is coming: Fortune reports that another $84 billion in government spending and tax breaks is headed your way.
That package is designed to be small enough to be politically palatable among the crowd now clamoring for a balanced budget. And the $84 billion will be divided among five programs, which include the following (ranked by their estimated cost):
Job credits creation: $27 billion. As I posted, this program would give employers a tax break for creating new jobs. It would amount to 15 percent of new wage costs in 2010 and 10 percent in 2011 and could create 5.1 million jobs.COBRA premium subsidy extension: $25 billion. This would extend a government program that pays for 65 percent of the cost of the premium for COBRA -- a program that allows terminated workers to stay on their former employer's health insurance plan -- for up to nine months for workers laid off between Sept. 1, 2008, and Dec. 31, 2009.
Home buyer tax credit expansion: $16.7 billion. This would extend beyond November a temporary government program that offers people making less than $75,000 a first-time home buyer tax credit. So far, 1.4 million tax filers have taken advantage of the program, and 15 percent of them bought their homes specifically because of the $8,000 tax break.
Emergency payments to seniors: $13 billion. This would pay seniors, veterans and the disabled $250 each next year to make up for the lack of a Cost of Living Adjustment in their social security checks due to an absence of inflation.
Peter Cohan is a management consultant, Babson professor and author of eight books including, You Can't Order Change. Follow him on Twitter.
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Reader Comments (Page 1 of 18)
10-21-2009 @ 12:43PM
kurt said...
Idiots, How about just lowering the FICO tax to EVERYBODY and see what that does to stimulate the economy .....no brainer.
Reply
10-21-2009 @ 1:22PM
mickey said...
This does nothing for me. I am being penalized because I have a job and was responsible enough to keep my mortgage in order. Otherwise, I am middle class road kill. I am being screwed by big business, big oil, the government, YOU NAME IT!! The first stimulus didn't work and this one won't either. Belly up to the bar and start bailing out the middle class. I promise we will pay you back.
10-21-2009 @ 1:50PM
Charles said...
Great idea! It would (should) happen quickly. It would not require the creation of a new Washington bureacuracy to plan and manage it. It would not require more bureacrats to make sure there is no fraud. Sounds like a winner!! But, too simple for Washington!
10-21-2009 @ 2:21PM
Remy said...
Darlin, they can't do that. They've already spent it. And I can tell Obama knows how us lil' fold are hurting, that's why he only let Michelle have 35 assistants and let her only buy 45 works of art this summer :)
10-23-2009 @ 11:41AM
hitnrunjoe@aol.com said...
ACORN!
The mainstream media were complicit in their coverage of the ACORN scandal. Their behavior was and continues to be an insult to democracy and journalistic responsibility as the Fourth Estate has ignored facts, engaged in one-sided sourcing, and avoided basic and inherently important journalistic questioning.
10-21-2009 @ 3:42PM
Ol' Joe said...
Stimulus, Deficit, Obama, Stupid. Need we say more?
10-21-2009 @ 3:45PM
Ol' Joe said...
A sure sign of insanity is to continuing doing the same thing over and over and expecting different results.
10-21-2009 @ 6:15PM
Tank said...
Damn good idea. Wish I had thought of it!
10-21-2009 @ 6:38PM
Eric said...
Tax redution for the Unemployed doesn't help. Paying less in taxes when you are making little or no money is kind of a stupid idea.
11-18-2009 @ 3:41PM
woodup2 said...
What is a FICO tax? Do you mean FICA ?
10-21-2009 @ 8:17PM
P. Niswrinkles said...
Hey Moron, FICO is Social Security tax....an entity that is about to be belly up,,,,MILLIONS of people who have paid there dues depend on this piss ant amout of money from thier monthly SS checks....You want to basicly eliminate Social Security? I hope you retire wealthy, and do not expecct any return from ALL that "FICO" you paid in...
People like you SUCK,,,you think of yourself, and ONLY yourself...I strongly believe our seniors deserve better, and trust me dick head, you might get lucky and be a senior some day, if you live long enough...
10-21-2009 @ 10:28PM
RICH said...
GREAT NOW A LAZY IDIOT BAILOUT
10-22-2009 @ 7:55AM
Gary Cason said...
Wow, now this makes too much sense. Keep in mind that reducing a tax isn't in a Democrat's option menu. They tax, tax , tax and then "gift it" back to those they favor. It's called keeping "the public" under control and making as many folks as possible "dependent" upon government. So they will give away $84 billion which will be placed into savings accounts. The banks will have money to loan but no one really has an incentative to borrow from fear of what's coming down with our "change" to a socialist/government controlled economy. That's it in a nutshell.
10-22-2009 @ 6:50PM
Frank said...
The real People's Financial Stimulus Plan that is currently underway is under a private website at www . peoplesstimulusplan . weebly . com. It's specifically for - American citizens. We need to make America strong again and that starts by making Americans financial strong.
10-21-2009 @ 12:47PM
Iridium said...
I still have a job, am not close to retirement, and already have a house.
THERE IS NOTHING THERE TO HELP ME!!!
Pretty soon I may not be able to afford my house to to energy and food inflation. Will there be help for me then?
Kurt is 100% right. LOWER TAXES FOR MIDDLE INCOME PEOPLE!!! Give me more of my own money that I work for and I will stimulate the economy. Stop giving my money away to other people.
Extending unemployment benefits will not help the economy. It may slow the collapse but it can't do anything to move the economy forward.
Reply
10-21-2009 @ 6:40PM
Ron said...
Extending unemployment benefits will help those that are getting unemployment benefits. Are you that damned heartless that you feel the people that are unemployed should just crawl into a hole and die?
As for take home pay? Mine is higher due to Obama's tax policies and I have not had a raise.
10-22-2009 @ 1:56AM
James said...
This is a heck of a lot better and a lot cheaper than Bush's ill fated $1.55 Trillion dollar stimulus money. Thank god he's gone.
http://padminiarhant.com/?p=2029
10-21-2009 @ 1:02PM
EG said...
Thank you Peter Cohan for finally putting into print what most of us are thinking. What are these elected officials thinking? It's getting much worse in every sector with very little to show for what the taxpayer has spent. It takes time? BS! Other solutions and politicians have to be found to get us back to where America used to be.
Reply
10-22-2009 @ 4:33PM
Tom T said...
What do you expect? Most in government are trying to make business decisions on the economy w/ no business experience. The pols w/ business experience are ignored or minimized. Most in government are trying to make decisions on the medical industry w/ no medical or industry experience. Those in DC who do (several doctors in congress) are ignored or shut out of the debate. Those w/ the experience make too much sense or the right decisions have no political "incentive" or "advantage". Its become all about corruption plain and simple. If you take a bucket of water w/ a leak(corruption and bureacracy) out of the shallow end of the pool and run and dump it in the deep end how long does it take to fill up?
10-21-2009 @ 1:34PM
giltydreamz said...
Obama, Congress, senate all LIARS ! !
Reply