dcsimg
Advertiser Disclosure: Many of the savings offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all deposit accounts available.

Second Stimulus Check For Obama 2009 Economic Stimulus Package?

Published 2/4/09 (Modified 3/9/11)
By MoneyBlueBook

Tax Cuts, Social Spending, and New Jobs - But What About Stimulus Checks?

A second economic stimulus package for 2009 is on the way and from the looks of things in the news, it appears newly minted President Barack H. Obama and his Democrat controlled House of Representatives and U.S. Senate are determined to ram the lucrative spending proposals through the legislative meat grinder no matter what, much to the chagrin of skeptical and deficit-weary Congressional Republicans.

As Congress debates the wisdom and intricate details of the current version of the 2009 economic stimulus package, it's clear that something needs to be done very soon to jumpstart and save our suffering economy before we spiral into a full blown economic depression. The unemployment rate is rising fast and everywhere you turn, there seems to be a never ending stream of unemployment and layoff news being announced everyday. The stock market has already shed more than half of its value since its peak in 2007, and billions to trillions of dollars worth of wealth have already been eliminated from the economy. Major banks and financial giants like Citibank, Bank of America, and JP Morgan Chase, once the financial pillars of our economy and the lifeblood of our credit industry, are now clinging onto U.S. government bailout money for dear life - hoping to still be in business at the end of every quarter.

With its almost limitless resources, it's clear the federal government must intervene somehow and put this broken economy and financial system back on track to prosperity. But the question is - what should be the government's role in all of this? More specially, what method should the government take to effectively jump start the economy to life again and ease the suffering on Main Street and Wall Street? Should the 2nd economic stimulus package continue to focus directly on sparking consumer spending by featuring a second round of free stimulus checks to consumers - perhaps for amounts much higher than the previous 2008 economic stimulus checks? Or should the plan this time around focus more on longer term indirect measures like job creation, infrastructure investment, and tax credits?

Current 2009 Economic Stimulus Package Focuses Less On Stimulus Checks - And More On Job Creation, Infrastructure Projects, and Tax Cuts

Before Barack Obama was elected president and during his 2008 Presidential election campaign, he supported implementing additional economic stimulus measures in 2009 - and even whispered at the rumored possibility of a second round of stimulus checks for taxpaying consumers in 2009 before tax day.

Whether a second stimulus check was a real possibility or not, the mere mention of a second round of stimulus payments and the prospect of getting more free government money certainly made my greedy ears perk up, but much of my optimism and enthusiasm were quickly dashed when Obama finally came into power. Almost immediately, he signaled a different stimulus proposal shift that favored a more multi-pronged approach of using tax cuts, tax credits, and pet projects, rather than relying on the 2008 economic stimulus check tactics of his predecessor, George W. Bush. Instead of just distributing free bailout money to the masses and hoping the funds will naturally trigger a huge surge in consumer spending activity to put the economy back on its feet again, Obama's stimulus package focuses more on middle class tax cuts and massive increases in government spending to fund various infrastructure investments, green energy projects, financial aid to states, and social education initiatives - designed to create jobs and put people back to work.

The current 2nd economic stimulus plan laid down by President Obama for 2009 is a whopping, super-sized $825 billion economic rescue package containing staggering spending initiatives and ambitious tax cuts, and sprinkled with dozens of pork-based proposals and suspect social initiatives within hundreds of pages of legislation. The current package contains $300 billion worth of aggressive construction projects designed to improve the country's���� infrastructure and create millions of new artificially generated jobs in areas like health care, renewable green energy, school upgrades and repairs, and transportation related improvements. The package also contains about $200 billion worth of state social assistance provisions designed to help keep state sponsored health and unemployment programs well funded - to offer a measure of cushion for those people who have been recently laid off due to the economic down turn. Along with the state assistance portion are other safety net type provisions to help fund and keep afloat local food stamp programs, food banks, state sponsored health care, and governmental health insurance plans for those suddenly unemployed.

The other primary feature of the current Obama economic stimulus plan is the series of tax cuts and tax credits offered to qualifying individuals and small businesses. Under the tax cut portion of the stimulus deal, small businesses suffering losses because of the economic downturn and recession would receive more favorable tax loss write off terms.

For individuals, the current 2009 economic stimulus package offers pretty generous tax cutting proposals. The plan highly favors low and middle-income working families since the idea is that these income groups are more likely to spend and invest their tax savings rather than save the money. In terms of stimulating the economy, increased consumer spending is good, and consumer saving is bad. Nicknamed the "Make Work Pay Credit" by President Obama, the proposed tax credit is supposed to reach close to 95% of workers, and benefit even working tax filers without any tax liability - typically very low income workers. Here is a basic overview of the stimulus plan's Make Work Pay Credit:

  • Middle Class Tax Credit: Under the plan, there would be a tax cut amounting to $500 a year for individuals, and $1,000 for couples. The economic stimulus would be issued in the form of a tax credit, and would be limited to those making $75,000 or less ($150,000 or less for married workers filing joint tax returns).
  • Low Income Tax Credit: For low income taxpayers, there would be an increase and expansion of the Earned Income Tax Credit to provide a refundable tax credit for low income assistance. The expansion would affect even working tax filers without any actual net tax liability - typically very low-income workers - and allow them to potentially qualify for free stimulus tax refund credits.
  • Child Tax Credit: For those who have children, a temporary increase in the child tax credit would result in larger tax refunds.

Should The 2009 Economic Stimulus Plan Be Re-Written Or Re-Packaged To Contain Major Provisions For A Second Economic Stimulus Check?

It's too bad the eventual 2009 stimulus plan probably won't contain another round of hefty stimulus check payments to ordinary consumers like the ones that were dished out last year. While the 2008 stimulus tax rebate wasn't much (only a few hundred dollars in my case), some additional government handouts in higher dollar denominations would still have been greatly appreciated by individuals like myself and put to good use. Plus, as an American consumer who embraces the virtues of capitalism, I feel I would have made a better decision for myself as to how best spend my portion of the stimulus money pursuant to what's in my own best capitalist self interest.

Overall, I think President Obama's administration is probably right in its revised efforts to focus more on job creation, offering greater tax cuts, and enhancing safety net protections to help suffering Americans survive the economic downturn for the long term. Offering greater financial assistance to struggling state unemployment programs (many on them on the verge of running out of funds), and stimulating growth with more job building projects is a proven way to stabilize the markets and improve consumer sentiment. However, I'm still a bit disappointed that the President and Congress have not explored the prospect of an enhanced second stimulus check further.

At least for now, President Obama's administration seems to have given up on the idea of using government stimulus checks en masse again to jump start the economy. Instead, Obama's advisers have indicated that they would prefer searching for viable ways to get government stimulus money into the hands of American taxpayers quickly that would not require or duplicate the tax rebate checks of last year. Apparently the $150 billion spent in 2008 in the form of stimulus payments to consumers proved to be quite an economic failure and pointless exercise of futility in terms of actually stimulating the economy to any extended degree. But perhaps the reason it didn't work properly the first time around was because too little money was given out to substantially change consumer spending habits to forcibly inject money back into the economy again (simply compare the $150 billion spent last year to the $800 billion-plus worth of spending being proposed for 2009).

Perhaps The Problem With The First Stimulus Checks In 2008 Was That They Were Too Little To Make Much Of An Impact

I have mixed feelings about the prospect of yet another around of direct stimulus checks to consumers. On one hand, I understand that there are many struggling American families getting hammered by higher living���� costs, and suffering from the ills of unemployment and layoffs. However, I'm not entirely convinced that the idea of handing out free money to families will really solve all of our economic woes and jump start the economy at its core. But yet I still wonder if perhaps we gave up on the idea of stimulus checks too early and that maybe, the concept is still workable. Maybe the amounts issued in 2008 were simply to small to change anyone's spending habits as initially intended - after all, only about $150 billion was spent in 2008, when the current 2009 economic stimulus proposal's already ballooned to a whopping $850 billion.

I know when I received my tax rebate stimulus check in early 2008, the check only amounted to a few hundred paltry dollars - not really enough for me to go on a greedy spending spree. So instead of spending it and doing my part to stimulate the economy, I ended up doing what most people probably ended up doing with their tax rebate check - putting the money in a bank and depositing it into a high yield savings account. Of course, my plans for the money would likely have been very different if the amount wasn't something low like $300, $600, or $1,200, but rather something as high as $10,000. If the stimulus check issued to me was indeed worth upwards of $10,000, I would very likely have saved a small portion of it but ended up plowing a sizable portion back into the economy by spending it on major expenditures like a new wide screen plasma TV set, new home appliances, or even a new car.

What If The Entire Economic Stimulus Bailout Package Went Towards 2nd Stimulus Check Payments? Would This Actually Stimulate The Economy?

Almost all polls among ordinary American consumers show overwhelming support for a second stimulus rebate check. After all, who would really oppose it? Who would be opposed to receiving free stimulus check money. Think the prospect of getting a second stimulus check worth as high as $10,000 as a consumer bailout is impossible? Well it's probably unlikely, but it's not out of the realm of financial or budgetary possibility, at least based on the fiscal numbers alone.

On CNN Money, a very interesting question was proposed in regards to the bank bailout and economic stimulus packages. If instead of bailing out these credit crisis-stricken banks (who probably deserve their fates due to the risky mortgage bets they greedily placed into subprime loans), we just gave all of the bailout money to taxpayers in the form of a massive consumer cash stimulus. How much would we each get if the entire current economic stimulus proposals were issued out to consumers as a second round of stimulus check payments? The second important question to ask is - would this actually stimulate the economy for the necessary extended period of time to get it going again?

To arrive at the figure, CNN Money took the total amount of the bank bailout package of $700 billion and added that to the proposed 2009 economic stimulus spending estimation at the time of $819 billion - resulting in a total bailout package of $1.519 trillion (that is quite a staggering figure). Dividing that number by 156.3 million, the total number of U.S. workers who filed federal income tax returns in 2008, that number equaled $9,718.49 per U.S. taxpayer, or roughly the equivalent of a juicy $10,000 cash bailout payment for each qualified tax payer. Now that's stimulus with oomph! With $10,000 in our pockets in the form of instant windfall economic stimulus checks, it's very likely that the tremendously high amount would be sufficient to incite a major change in spending activity than a measly $600 check ever could.���� People would probably go out and actually start stimulating the economy by buying cars, purchasing TV's, paying for college studies, and going on vacations.

As a dose of devil's advocate inspired reality though, while it's very possible that $10,000 checks in every working taxpayer's hands would probably send the economy skyrocketing, it's also possible the growth could be short lived and not actually get to the true root of our current economic problems. The massive surge in consumer spending probably won't do much to solve the lingering fundamental issues surrounding our current credit crisis, which centers around a failed banking system and a failed home mortgage lending market. But then if repairing the banks and injecting confidence back into our home mortgage and credit lending markets are our primary objectives - I'm not sure the current economic stimulus proposals by President Obama, which are focused more on tax cuts and job creation and most prominently, aggressive social spending programs - will actually accomplish those goals. At least for stimulus checks, they could be able to help alleviate some of the immediate economic suffering being felt by ordinary consumers - many of whom are fighting to stay alive, with a great deal currently resorting to desperate emergency fund measures like 0% credit card offers, balance transfers, and risky high interest payday loans.

I'm curious as to everyone's opinion on the wisdom of a second stimulus check (if it ever happened). What's your take? Would substantially higher stimulus checks of $1,000, or possibly even as high as $10,000, actually encourage you to spend the money (thereby stimulating the economy) instead of merely saving the amount or using it to pay down debt? How would your decision compare to how you actually spent your previous 2008 tax rebate stimulus check?

Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.

Feed for this Entry

392 Responses to “Second Stimulus Check For Obama 2009 Economic Stimulus Package?” 

  1. Savannah says:

    I agree... Obama is such a scam and a fraud. Why is he bailing out the big banks and continuing on with his stupid long winded speeches filled with flowery expressions without substance. The man definitely can give an energizing speech, but his policies are terrible for this country.

    Why is he increasing taxes and giving the money to those that don't work!? The whole lowering taxes on the so-called 95% of the population is total crap. Doesn't he realize that the people he is raising taxes on are the ONLY ones who have the financial means to create new jobs?? Obama is turning into a maniacal communist....and his fanatical supporters filled with the likes of MSNBC's Chris Matthews and the left wing media are turning a blind eye to the doomed failure of his proposed economic stimulus policies. This Obama economic stimulus package will fail miserably...mark my words.

  2. Debbie Sullins says:

    I agree that 10,000 dollars in every taxpayers hand is the way to go. Then people could pay...instead of charging. Banks and finance companies would get the money from most people anyway. Plus lower income folks might be able to work just one job instead of two!

  3. Carol Anne says:

    I have had mixed feelings about a second stimulus check....but now I am leaning more toward thinking this is a good idea. They say the last check did not get spent as they thought it would. I work part time and my husbands hours have been cut back to 20-24 hours a week. I am very sure a lot of Americans are in this boat or worse. I do not understand how the huge banks, etc. keep qualifing for bailout money that they are not loaning out to the public sector. At least the majority of everyday people would spend stimulus money on either, bills, food, and purchases right away. Don't get me wrong....I wouldn't mind if I had an extra 13-15 dollars on our check each week. But I don't think it will work out that way when you get down to it....
    Tax cuts for homebuyers....who can afford to buy a home these days (not too many) even if you could get financing.
    I know NOTHING is going to fix all of our economic troubles but I think a substantial economic stimulus in the hands of people who REALLY would spend it would get money out there in the system soon.
    Job creation ..... I think this is great, but I know it will take a while to see this be able to make a dent with the new unemployment numbers as they are. I guess we are just in a bad situation here and may be for a while.
    I wish everyone all the best out there.

  4. Pua says:

    Well, like my refund, I'd probably spend some of the stimulus and purchase a newer vehicle that's either 7 or 8 thousand dollars total. Then I'd stick the 2 to 3 grand in the bank and spend that within a week or so? Maybe a little longer. What the hec, it was given to me to spend. And it won't even dent my education loan which I'll eventually have to pay.

  5. where is our money going? says:

    WITH THE THINGS THAT ARE GOING RIGHT NOW...I THINK IM GOING TO DECLARE BANKRUPTCY!!!!!!!!

  6. jackie says:

    i vote for a 2nd stimulus check. my husband and myself are so far under right now we are gurgling for air. The last check we got went to paying off bills, and i would like to spend some money on household items we need desperately.

  7. Valerie B says:

    I agree that this stimulus plan may not work. I hope it does for the economy's sake, but for me, any extra change on our paychecks goes right into savings. When we get checks in large sums, we are far more likely to spend, spend, spend. I thought our new President claimed to "know" his average American people. Doesn't sound to me that he knows a lick about what we would do. But again, I'm hopeful. We'll see what happens.

  8. Billie C says:

    I agree, if you want to help the normal, average American give them some of the Money your giving the banks that will only use it toward their benefit and not ours. A larger stimulis check would be very helpful, I could pay off bills and get a car, so I can get to work on time, and pay back in my taxes.

  9. ByFaith says:

    I guess we all will have to wait and see exactly how this will pan out.

  10. Cora Woodward says:

    We are a retired couple and very conservative. My husband wouldn't even apply for the stimulus package. He said it was a bunch of foolishness. I thought if the government wanted to give us money I would be happy to receive it. I applyed using Turbo tax. It was electronically put in my account. I invested the whole thing and have added to it every month since May 2008. My husband still does not know we have it. He has been a hard worker all his life and has not been able to accumulate any sizeable savings. I have always thought that saving was a good idea. Now it seems that saving is a bad idea. We have gone too far toward Socializm. The Government has been too much of a "nanny". We are all too inclined to look to the government to solve our problems. Old conservative, moral and fiscal values need to be encouraged even if it hurts. I haven't applied for the $12,000 package advertized as we are retired and not in the mood to start a new business. We don't have any debts to pay off. We live frugally with all our needs met. We can't complain.

  11. Mark says:

    Until our highly paid polititions have to pay the same bills that we the taxpayers have to pay they really will never have a clue what we really have to go through to make ends meet. Let them pay for all thier trips and meals while at home , work or "on the road " not out of ours they make a salrey we don't get expence accounts to pay for the incidentals we run into we pay our way as we go along. I really dont understand how we can over spend on the budgets that our public officals pass we cant overspend on our checking accounts to long or we'll end up doin' hard time Most if not all have a college degree? did they go to sleep in math class? 10-120=-110 right? lets make each bill or program stay within means and bounds. afterall we have to keep within our means and bounds.

  12. Jason says:

    If We can't expect the gov't to help the Us, the american taxpayer, then why should They expect Us to help Them????

  13. oh my what a mess says:

    I could only wish to have $34000 "gross" income. I work my butt off and have for years. I bought my vehicle for $4000.(which now has over 168,000 miles on it & the most expensive I have ever owned). I paid (and am still paying for) $89000 for my home 15 yrs ago. Now to have all my equity choked. I make less than $21000 yr. Single with 2 children still living at home with me. I get a small child support check monthly (very fortunant for that) .I also owed a very little 4000.00 to the bank (which I had to borrow for my vehicle) Well, guess what? A large tree fell through my home costing me about $8,000 more than the insurance would pay to make my home good enough to live in again. I had to move my children and I into an apartment for 4 months (which accumulated more expenses, (double utility bills)) Then the ultimate slap in the face... CANCER...at the age of 36... now I am in debt for over $30,000 !!!DID I ASK FOR THIS ???
    NO , & I don't think anyone does !!! & for Mr. self reliant & others that agree. I did have my dollars in a streight line. I don't take vacations, I don't go out to eat & all my clothes are either free hand-me-downs or from goodwill. & I don't get gov. help either!! So I don't think "REAL" PEOPLE want to hear your thoughts about how well you handle your money. It is a real jearker to people like me who handle their money well to have it taken away from you with the HARD, UNEXPECTED SLAPS OF LIFE !! I don't expect the gov. to bail everyone out, but I sure as "H" don't think the BIG should get "all" of what the gov. is planning on handing out. As we all know the rich just get richer and thats the way it's always been.
    GOD BLESS US ALL, BECAUSE FAITH WILL PREVAIL AND ALL WILL GET WHAT WE/THEY DESERVE !!!

  14. Jane says:

    If we got another check we would have to admit that information on our unemployment vouchers so that would help to free up some of the government spending on the unemployed.
    I think if the government would go into the business places now(factories) and get rid of the illegals who are working there think of how many jobs would be available for us who are legal,wouldn't that help save a little on the unemployment bail out that we need to keep the money coming in?

  15. rlviolet24 says:

    If the GOVT. wants to do something for the people do it for the.....PEOPLE. When people do not spend then companies shut down... nothing to be made if people do not buy...Shelves will stay full. It is a viciuos circle , but we need to slow it down if anything ....Give people money, not companies that gave big bonuses. Give bonuses to the people......The ones who really deserve it.

  16. wesley hubbard says:

    i got layoff work i lost my health will the stimulus packet help me with this i have a doctor on 3/4/2009 my doctor make the app before i found out me insurance was cancel does mt insurance have to paid this doctor bill anyway wesley habbard

  17. RELYINGONMYSELF says:

    wesley hubbard:

    You would need to check with your prevous HR dept. Most companies cover the employees through the end of the month since you/they already paid the premiums. If you don't want to call the employer check with your health insurance company they should have a termination date on their records. If your insurance is canceled maybe the doctor will work out a payment plan with you to pay for the appointment. I know most offices have a note that says payment is due at time of service but some doctors are understanding. I say SOME! I know the company I work for is on of the largest medical providers in the area where I live and they are very understanding. The hospital works with all patients to make sure they get medical attention without having to worry about the cost.

  18. Theresa Mahoney says:

    Well, since I am a "little guy" this probably wouldn't even be considered, but here goes. If the government would give each family $500,000 which the signed agreement that $250,000 would go back into the government for taxes, then we could take the other $250,000 and payoff our mortgage, which would benefit the banks or mortgage companies, buy new vehicles or payoff the ones we have which would benefit the car dealerships or the banks, and we could payoff our credit cards which would again benefit the banks or credit card companies. Then we could take our pay checks, because those of us who work would also have to sign an agreement that we would not quit our jobs, and we would be buying food, gas and eating out again which would also help the economy. But who am I but just a "little guy" or rather "little gal" in my case. And the rich keep getting richer.

  19. the muslim is so wrong says:

    Our country is going to hell with his help of his muslim religion. Since he is a muslim, he wants to destroy our way of life and institute the radical muslim law for all. First, our country will become a socialist government, then it will become a very strict muslim Law where no one is free----------most of all women!

  20. another struggling american says:

    i am 26 years old have been married for 3 years have a 3 year old son and a 2 month old daughter, i made a whopping 26000 last year due to getting laid off from 3 jobs in a row, i filed my taxes this year and got a whopping 2500 back, i started a new job in november and just got laid off again the same day my son turned 3 years old and my daughter turned 3 months old, (jan23) i have not been able to find another job yet, i live in a small town in iowa, i had 2 trucks that i just recently sold to pay bills and rent, the little tax refund i recieved went towards rent and bills as well. we do not spend needlessly and we just barely get by struggling the entire time i cannot recieve unemployment benefits and for whatever reason we cannot recieve welfare, or food stamps, or any aid. i am a stay at home father now with my wife working in a hotel and is in fear of losing her job at this time due to the hotel closing down. i dont know exactly what were going to do, however everything usually has a way of working itself out, its extremely hard to not get frustrated with the government taking so long to help out its american citizens with a stimulus check, or more job opportunities or just an actual reassuring statement of economic upraise, i realize its about impossible to predict the outcome of whatever they are going to decide, but i am hopeful that something happens soon before i have to move my family in with a friend or family member because we get kicked out of our house for lack of funds. sure a 10,000 dollar check would be a blessing however how far will it actually go, buy a car or pay some bills, i would definately use it for similar things, but its not going to get everybody out of poverty, this recession is just such a slap in the face of the reality of life that no matter how hard you work or how many luxuries you have there is always someone who can "snap there fingers" and take it away from you and leave you saying "can i have some more, please" there is nothing empowering about having to beg for survival...... but i am going to keep on the job search and keep my kids smiling and hope for the best. i do not ask for handouts and i am not going to turn down others if i can help them, i will just keep living day to day watching and waiting until the light can be seen at the end of the tunnel.....

Leave a Reply



If you liked this site, please Add To Bookmark and/or Subscribe To A FeedReader

Search this site