Another round of stimulus checks?

[Smurfysmiles]

Have you guys heard anything about this? Think it''s a good idea or not? Supposedly it would happen around Christmas time.

 

[Smurfysmiles]

Here''s one of the articles I found related to this.
_______________________________________________________________________________

WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke told Congress Monday a fresh round of government stimulus is a good idea
because there''s a risk the country''s economic weakness could last
for some time.

Bernanke''s remarks before the House Budget Committee marked his first endorsement of another round of energizing stimulus, something that Democrats on Capitol Hill have been pushing. The Bush administration, however, has been cool to the notion.

"With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate," Bernanke said in prepared testimony to the panel.

A trio of hard blows from the housing, credit and financial crises has badly pounded the economy.

Many analysts predict the economy will shrink later this year and early next year, meeting the classic definition of a recession. Some believe the economy already jolted into reverse during the July-to-September quarter.

The nation''s unemployment rate - now at 6.1 percent - could hit 7.5 percent or higher by next year, according to some predictions.

Bernanke suggested that Congress design the stimulus package so that it will be timely, well targeted and would limit the longer-term affects on the government''s budget deficit, which hit a record high in the recently ended budget year.

Any stimulus package would need to kick in quickly to entice people and businesses to boost spending and buck up the economy during the period in which economic activity would be otherwise weak, Bernanke said.

Bernanke said the package also should include provisions that would help break through the stubborn credit clog that is playing a major role in the economy''s slowdown.

"If the Congress proceeds with a fiscal package, it should consider including measures to help improve access to credit by consumers, home buyers, businesses and other borrowers," Bernanke said. "Such actions might be particularly effective at promoting economic growth and job creation," he added.

 

[strmrdr]

could use the money but have to say no because it would not help the economy and hurt the country in the long run.

 

[ksinger]

Whether it will hurt the economy or not is hardly an easy call at this point.

From Krugman, the latest Nobel Prize winner in economics, this:

November 14, 2008
Op-Ed Columnist
Depression Economics Returns
By PAUL KRUGMAN
The economic news, in case you haven’t noticed, keeps getting worse. Bad as it is, however, I don’t expect another Great Depression. In fact, we probably won’t see the unemployment rate match its post-Depression peak of 10.7 percent, reached in 1982 (although I wish I was sure about that).

We are already, however, well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction. When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.

To see what I’m talking about, consider the implications of the latest piece of terrible economic news: Thursday’s report on new claims for unemployment insurance, which have now passed the half-million mark. Bad as this report was, viewed in isolation it might not seem catastrophic. After all, it was in the same ballpark as numbers reached during the 2001 recession and the 1990-1991 recession, both of which ended up being relatively mild by historical standards (although in each case it took a long time before the job market recovered).

But on both of these earlier occasions the standard policy response to a weak economy — a cut in the federal funds rate, the interest rate most directly affected by Fed policy — was still available. Today, it isn’t: the effective federal funds rate (as opposed to the official target, which for technical reasons has become meaningless) has averaged less than 0.3 percent in recent days. Basically, there’s nothing left to cut.

And with no possibility of further interest rate cuts, there’s nothing to stop the economy’s downward momentum. Rising unemployment will lead to further cuts in consumer spending, which Best Buy warned this week has already suffered a “seismic” decline. Weak consumer spending will lead to cutbacks in business investment plans. And the weakening economy will lead to more job cuts, provoking a further cycle of contraction.

To pull us out of this downward spiral, the federal government will have to provide economic stimulus in the form of higher spending and greater aid to those in distress — and the stimulus plan won’t come soon enough or be strong enough unless politicians and economic officials are able to transcend several conventional prejudices.

rest of the piece here

 

[whatmeworry]

I''ve heard Krugman argue that the next round of stimulus shouldn''t be in the form of checks like last time, because alot of folks just banked the checks instead of spending it. He argues that the next stimulus should be things like extending unemployment benefits and direct aid to states and municipalities to make up for cuts in services.

 

[Dancing Fire]

hope i get a $30k stimulus check. i''ll buy myself a 2.5ct diamond.

 

[trillionaire]

My impression was also that the next ''stimulus package'' was not going to be in the form of checks going to citizens, but to businesses and industries that need the financial injection. It''s pretty hard to know these days what the best thing to do in the short run, but my long term understanding is this:

*Americans need to start saving. A lot.
*Americans need to redefine their relationship with credit, become MUCH more frugal and live within their means.
*the health care system needs a MASSIVE overhaul, as medicare/medicaid eats up far to much of our annual budget, and will grow substantially as more boomers retire. We need an efficient and less expensive system for our long term sustainability.
* America needs to fix its balance of trade problem, and Americans need to buy American goods. There are a number of ways to accomplish this, but most will probably not be super popular politically.
*government needs to drastically cut spending, by any means necessary.

I think this is the starting point, with more to develop further...

 

[Skippy123]

Date: 11/14/2008 9:23:00 PM
Author: trillionaire

*Americans need to start saving. A lot.
*Americans need to redefine their relationship with credit, become MUCH more frugal and live within their means.
*the health care system needs a MASSIVE overhaul, as medicare/medicaid eats up far to much of our annual budget, and will grow substantially as more boomers retire. We need an efficient and less expensive system for our long term sustainability.
* America needs to fix its balance of trade problem, and Americans need to buy American goods. There are a number of ways to accomplish this, but most will probably not be super popular politically.
*government needs to drastically cut spending, by any means necessary.

I think this is the starting point, with more to develop further...

excellent points Trillionaire!!! I agree on every one of them.

 

[LAJennifer]

Date: 11/14/2008 9:40:54 PM
Author: Skippy123

Date: 11/14/2008 9:23:00 PM
Author: trillionaire

*Americans need to start saving. A lot.
*Americans need to redefine their relationship with credit, become MUCH more frugal and live within their means.
*the health care system needs a MASSIVE overhaul, as medicare/medicaid eats up far to much of our annual budget, and will grow substantially as more boomers retire. We need an efficient and less expensive system for our long term sustainability.
* America needs to fix its balance of trade problem, and Americans need to buy American goods. There are a number of ways to accomplish this, but most will probably not be super popular politically.
*government needs to drastically cut spending, by any means necessary.

I think this is the starting point, with more to develop further...

excellent points Trillionaire!!! I agree on every one of them.

Me too!

 

[Smurfysmiles]

They have mentioned giving people with student loans a break as well which I think would be great because the money being charged is getting to be beyond ridiculous! Too many people couldn't afford to go to college as it was before and it's just getting worse.

Personally I am for the stimulus check but I am biased as I lost my job 2 weeks ago.
Although I also agree with everything trill said Very good points

 

[Italiahaircolor]

I voted for the stimulus checks for a few reasons...

Mainly, I feel like America is scared. Rightfully so. We're bombarded with business closings/failures/bankruptcies. And that becames a very dangerous catch 22. In my personal life, many of my financially stable friends have gone into a savings tailspin...they refuse to shop, some are even stock piling canned goods. These, are the people that can afford to keep spending. But we keep hearing about the shoe dropping and we're living in financial fear. Yes, savings is a good thing...but when American's stop spending money, the economy does not rebound either.

We, as a country, need to make smart purchases. My DH and I are fine when it comes to money, and ergo, this Christmas season for us will be no different. I will spend cash, ignoring my CC's...and hopefully, even though it probably won't make a huge difference, I will continue to spend what I can afford too. I feel that a small injection of cash will inspire people to do the same. Maybe lesson's will be learned, and people will turn their check into a mortgage payment or car note...or maybe they will just hit the local Target and load up a cart....but, the only way to pump money into the economy is to actually do so.

Now, I didn't receive a check the first go round (we were not eligable) and probably won't get one this go round either...but clearly American moral is low--and if $600.00 dollars will help (even in a small way for a family) then I'm all for it.

 

[trillionaire]

Date: 11/14/2008 10:52:19 PM
Author: Smurfysmiles
They have mentioned giving people with student loans a break as well which I think would be great because the money being charged is getting to be beyond ridiculous! Too many people couldn''t afford to go to college as it was before and it''s just getting worse.

Personally I am for the stimulus check but I am biased as I lost my job 2 weeks ago.

Although I also agree with everything trill said Very good points

Smurfy, addressing student debt is SO IMPORTANT! I''m so glad you brought it up, it''s really like modern day slavery to let 18 yr olds graduate with 100K+ of debt, the sign up for it before they have ANY IDEA of what that means, what the repayment plan will be like, etc. It''s tragic, and needs to be addressed, otherwise we are going to see a huge class divergence in education levels, with the middle class being the first one squeezed out!

 

[Smurfysmiles]

I know if FI and I got a stimulus check all of it would go to our student loans which really sucks. I actually picked the college I went to simply because it was the cheapest with the degree I wanted and was a 4 year. Fi picked the school he went to because I think he looked more at the program he was in more than the actual cost itself. Doesn''t help that he decided to spend a semester studying in Sicily but that was his decision before he even met me so whatever. While he was at his fancy college I got sucked into the whole credit card mess that they entice young still teenagers with and quickly built up a debt of almost 4000 dollars in a year. I just finally paid all of that off this summer and am much wiser about it now even though I had to learn the hard way. God, money sucks!

 

[Sabine]

Hmmm...Now, I wouldn''t turn down free money, but luckily the economic crunch hasn''t hit dh and I that hard. We''re still young and are just starting out with our financial planning/saving. We''ve always lived below our means, so we''re doing okay keeping up with that, and our jobs are not in jeopardy. Could we use the ability to do something fun with a check, yes! Do we need it, no. I''d also LOVE help with my student loans, but I''ve been paying steadily on them for 3 years now and am able to keep paying on them, although it just may take me all of the 30 years I have to completely pay them off...

However, I think it would be foolish to just send out another check to all citizens with no stipulations and NO EDUCATION on how to actually use the money to help the economy. It might make people feel a little better, but that won''t last any longer than it takes to spend the money, and I can''t see how it will really help in the long run unless it is accompanied with major changes.

 

[MoonWater]

Date: 11/15/2008 1:07:00 AM
Author: trillionaire

Date: 11/14/2008 10:52:19 PM

Author: Smurfysmiles

They have mentioned giving people with student loans a break as well which I think would be great because the money being charged is getting to be beyond ridiculous! Too many people couldn''t afford to go to college as it was before and it''s just getting worse.

Personally I am for the stimulus check but I am biased as I lost my job 2 weeks ago.


Although I also agree with everything trill said Very good points

Smurfy, addressing student debt is SO IMPORTANT! I''m so glad you brought it up, it''s really like modern day slavery to let 18 yr olds graduate with 100K+ of debt, the sign up for it before they have ANY IDEA of what that means, what the repayment plan will be like, etc. It''s tragic, and needs to be addressed, otherwise we are going to see a huge class divergence in education levels, with the middle class being the first one squeezed out!

Amen to that!

 

[KimberlyH]

Date: 11/14/2008 9:55:16 PM
Author: LAJennifer

Date: 11/14/2008 9:40:54 PM
Author: Skippy123

Date: 11/14/2008 9:23:00 PM
Author: trillionaire

*Americans need to start saving. A lot.
*Americans need to redefine their relationship with credit, become MUCH more frugal and live within their means.
*the health care system needs a MASSIVE overhaul, as medicare/medicaid eats up far to much of our annual budget, and will grow substantially as more boomers retire. We need an efficient and less expensive system for our long term sustainability.
* America needs to fix its balance of trade problem, and Americans need to buy American goods. There are a number of ways to accomplish this, but most will probably not be super popular politically.
*government needs to drastically cut spending, by any means necessary.

I think this is the starting point, with more to develop further...

excellent points Trillionaire!!! I agree on every one of them.

Me too!

Thritto!!!!!

I can't applaude you enough for this post. We, as a society, have such a bad relationship with money.

I don't think another round of stimulus checks will do a thing to help us. We need need to become better savers/investors/money managers, not wait for the gov't to give out more money it doesn't have as a quick fix; it's like putting a bandaid on a brain injury.

 

[Mannequin]

Date: 11/15/2008 12:33:21 PM
Author: KimberlyH

Date: 11/14/2008 9:55:16 PM

Author: LAJennifer

Date: 11/14/2008 9:40:54 PM

Author: Skippy123

Date: 11/14/2008 9:23:00 PM

Author: trillionaire


*Americans need to start saving. A lot.

*Americans need to redefine their relationship with credit, become MUCH more frugal and live within their means.

*the health care system needs a MASSIVE overhaul, as medicare/medicaid eats up far to much of our annual budget, and will grow substantially as more boomers retire. We need an efficient and less expensive system for our long term sustainability.

* America needs to fix its balance of trade problem, and Americans need to buy American goods. There are a number of ways to accomplish this, but most will probably not be super popular politically.

*government needs to drastically cut spending, by any means necessary.


I think this is the starting point, with more to develop further...

excellent points Trillionaire!!! I agree on every one of them.

Me too!

Thritto!!!!!

I can''t applaude you enough for this post. We, as a society, have such a bad relationship with money.


I don''t think another round of stimulus checks will do a thing to help us. We need need to become better savers/investors/money managers, not wait for the gov''t to give out more money it doesn''t have as a quick fix; it''s like putting a bandaid on a brain injury.

Quadritto. Trill, you rock.

 

[MichelleCarmen]

Part of me is bitter thinking banks are being bailed out left and right and yet, us average Americans aren''t seeing a cent of that bail out package. Like Sabine, I wouldn''t turn down "free money," but if a check did came, it''d go in the bank or I''d pay my car insurance for the next 6 months, so it''d go to good use and not stimulate the economy in any way. I wouldn''t blow it on junk I don''t need.

 

[omieluv]

Date: 11/14/2008 7:51:51 PM
Author: strmrdr
could use the money but have to say no because it would not help the economy and hurt the country in the long run.

My thoughts exactly.

 

[omieluv]

Date: 11/15/2008 1:07:00 AM
Author: trillionaire

Date: 11/14/2008 10:52:19 PM
Author: Smurfysmiles
They have mentioned giving people with student loans a break as well which I think would be great because the money being charged is getting to be beyond ridiculous! Too many people couldn''t afford to go to college as it was before and it''s just getting worse.

Personally I am for the stimulus check but I am biased as I lost my job 2 weeks ago.

Although I also agree with everything trill said Very good points

Smurfy, addressing student debt is SO IMPORTANT! I''m so glad you brought it up, it''s really like modern day slavery to let 18 yr olds graduate with 100K+ of debt, the sign up for it before they have ANY IDEA of what that means, what the repayment plan will be like, etc. It''s tragic, and needs to be addressed, otherwise we are going to see a huge class divergence in education levels, with the middle class being the first one squeezed out!

This happened to me. My loan was 60k. When I had graduated, the economy was starting to tank (right before 9/11), so there really was not much out there for my in what I studied. Had to take a crappy job for 5 years, not related to what I wanted to do. It kinda paid the bills, but I could not pay enough toward my loan, so I had to live at home, which I hated. I moved out after 4 years when I got an ok increase in pay, but it has been slow going and I finally paid it off last month (I am 31). It definitely was a burden and I paid way more than the minimum balance to get it out of the way. However, I really did not do anything. Minimal spending, no movies, no car, nothing. I wanted it paid off fast because I consolidated when the rates were 6% and I had no idea that 1 year later they would crash down to the 3-4% range. My brother''s interest rate is 2%, he got lucky.

Right now, I am a contractor because it is so frigging hard to find a job in my area. Still have not professionally recovered from when I graduated as now I hear I am "tainted" because I am a contractor. At least I am making 20K more than my crappy job.

 

[ksinger]

Date: 11/15/2008 12:39:36 PM
Author: equestrienne

Date: 11/15/2008 12:33:21 PM
Author: KimberlyH

Date: 11/14/2008 9:55:16 PM

Author: LAJennifer

Date: 11/14/2008 9:40:54 PM

Author: Skippy123

Date: 11/14/2008 9:23:00 PM

Author: trillionaire


*Americans need to start saving. A lot. Can you say 1929? To a great degree you are exactly right. However, DO this and you get an added factor that is exacerbating our problems. This is exactly why the Great Depression was so "Great". Like us, those people had been living beyond their means, and when it all started to fall apart, they pulled back. They SAVED and lived within their means. Then as now, from the way things are shaping up, there was a surplus of goods that were produced using projections that said that good times would never grind to a halt. Our entire economy is built on massive consumption - stopping that, in essence overnight, is going to be devastating.


I think this is the starting point, with more to develop further... I too could develop further, but I''m off to consider some "consumption" of goods...(jewelry of course!

)

excellent points Trillionaire!!! I agree on every one of them.

Me too!

Thritto!!!!!

I can''t applaude you enough for this post. We, as a society, have such a bad relationship with money.


I don''t think another round of stimulus checks will do a thing to help us. We need need to become better savers/investors/money managers, not wait for the gov''t to give out more money it doesn''t have as a quick fix; it''s like putting a bandaid on a brain injury.

Quadritto. Trill, you rock.

 

[Elmorton]

I''d love another free $1200 from the gov''t, but I think it would be a pretty stupid move for the economy.

 

[purrfectpear]

I would be above the income limits so it wouldn''t apply to me. Still I do have an opinion. In theory it''s supposed to stimulate the economy by getting people to spend more, right? I think the people who might really "need" it will only apply it to credit card bills. They''ve already spent it before they got it. So in that sense, it won''t help the economy. The other people making $40K and above don''t need it. They''ll either bank it (still not helping the economy) or spend it on something they would have purchased anyway - living expenses like groceries, gas, whatever.

This theory that Americans get $600 and immediately go out and buy flat screen TV''s is bogus IMO.

 

[Italiahaircolor]

what if the gov put it on something like a Visa gift card...so that they cannot save it, and have to spend it?????

 

[crown1]

it is time to get out of this "false" economy mindset. if they want to give out money maybe build some manufacturing plants and actually create some jobs and products. how about encouraging people to live within their means instead of continue to expect someone else to support them? i think we need to reward actual work and not schemes to get something for nothing. grants, entitlements and give aways have not made us economically healthy or happy it''s time to take the correction and start working for a living.

 

[ksinger]

Date: 11/17/2008 6:16:43 AM
Author: crown1
it is time to get out of this ''false'' economy mindset. if they want to give out money maybe build some manufacturing plants and actually create some jobs and products. how about encouraging people to live within their means instead of continue to expect someone else to support them? i think we need to reward actual work and not schemes to get something for nothing. grants, entitlements and give aways have not made us economically healthy or happy it''s time to take the correction and start working for a living.

And "rewarding actual work" would also mean not putting policies in place designed to encourage the funneling vast streams of money into the STOCK MARKET over SAVING. What is making money in the stock market if not "something for nothing"? You don''t EARN it, you pick a stock, and hope it gains in value. Sounds like gambling to me. Is anyone with a 401K or IRA still unclear on that now?

If I sound a bit cranky, I''m a bit closer to retirement age than many on this board. I''m also glad my mother died before she could see the money she scrimped every day of her life to accumulate disappear. She was very very wary of 401k''s and IRA''s but felt she didn''t have much choice. It would have broken her to see the little she had worked so hard for go to nothing.