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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?

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

  1. RELYINGONMYSELF says:

    I also believe the Realty business has a lot to do with out problems. To many houses were over appraised. Realtor have an idea of what you do for a living and what you can afford...they were to concerned with their paycheck to think that these people can't afford these houses.

    HOLLINMICHIGAN: I'm sorry to hear that. It must have felt great that your house was appraised so high and then a few months later for the bottom to fall out on it. And as far as college goes...it's NEVER to late. I firmly believe one of the reasons I make the money I make is because I had experience to back my degree. I worked before I went to college which made me more marketable to companies. I worked full-time while attending college. May God Bless you and help you though these rough times! Keep your head held high...I'm a firm believe in karma...what comes around goes around. These banks that are treating people like you've been treated will have it come full circle unto them.

  2. Joe wesoloski says:

    I believe the economy is like a tree. If you want it to grow you have to feed it. How do you feed a tree you ask. You feed it at the roots not the leaves like are Government is by giving the banks and big businesses bailout money!!!!!

  3. NanCy says:

    I agree with everyond on here that wants the MONEY. I am a mother of one I'm 23 years old. iI think that we should get the STIMULUS because I mean WE WORK hard for it and we deserve for it in return. I make $10 and hr and only do 2 hours and 15 15 mins. a day. I WISh for President Obama to give us taxpayers atlesst $2000 each and for our claimed child(rens) $1000 for each claimed chlid. If President Obama would just Please grant our WISHES then I would love a new house, because I want to pay off my debts, put some in savings for my sons college, buy a car for my brother, buy new washer and dryers for my mom. And give my mom a vacation with my dad to Indiana to go see her sister. So President Obama PLEASE grant our WISHES and give us the 2nd STIMULUS!! P.S " IT'S OUR MONEY and WE WANT IT NOW!!!

  4. NanCy says:

    I agree with all those whom wants the STIMULUS, I need for President Obama to give us our MONEY that we need. $1000/$5000/$10,000 won't hurt to give to hard working tax payers. I make only $10/hr and works only 2 1/2 hrs per day. I need the money to pay off my DEBTS, buy my mom a vacation to go see her SISTER in Indiana, buy my brother a NEW CAR, and my FAMILY something that theyLll never forget me for! I'm a mother of one, my dream is to buy a NEW HOUSE,buy me a NEW CAR, put money in savings for my son (he's only 5). But most of all take my whole family on a vacation to DISNEY WORLD, we've have not been on a family trip before. President Obama everyone of us is depending on you to get what we are really WISHING FOR!!! Please GRANT IT!!!

  5. Lisa Fryma says:

    What about the disabled who barely make enough or don't make enough for their medicines? What about the people on SSI and SSD? We barely get by and can't work due to medical problems. Because we don't pay taxes shouldn't we get a piece of the pie? It shouldn't be just for the middle class people. How about the poor? This is America! Weren't we all created equal?

  6. where is our money going? says:

    People people…im a CEO for a huge bank (in your face!).

    Now let's talk about this stimulus package (for you common pathetic fools) for Wallstreet, Automakers & Bankers…we all agree with Mr. President Obama great plans.

    With the trillions and billions (hehe) aid we are receiving, don't you see we CEOs can afford to create HUNDREDS OF NEW JOBS for sucke…I mean hard working slav…Americans (yeah right…ill hire SOME but make sure their work is doubled, anyone complain ill just lay him/her off and hire some new fool that really needs a job).

    Those who are asking for handouts…SHAME ON YOU this world is not all about YOU & and I might add the WORLD DOESN'T REVOLVE AROUND YOU !!!

    Enough said! We the great leaders will put that stimulus money to good use and hopefully turn this economy issues around. (darn I have to fix my BUGATTI VEYRON…nevermind I better just buy a new one with my BONUS)

  7. I believe in carma says:

    To WHERE'S YOUR MONEY GOING. Carma is a strange thing, think about your comment maybe at your next doctors appointment and he says some thing like "I'm sorry Mr. CEO but you have stage 3 colon cancer and it's inoperable, you have only 3 weeks to live"! Carma may not always be swift, but it is just!!!!!!!! Do unto others as you would have done unto you. If I owned a tow truck company and you were broke down in the middle of no-where, 30 degree weather, I would pass you and your $50,000.00 gold card by and pick up the family of 5 that had nothing for payment but conversation on the long trip to get them to a safe destination!

  8. titi says:

    I think that the stimulus should pass for those who are in debt other then that, someone needs to come up with a batter plan if they know so much about downfalls to help everyone equally.

  9. ByFaith says:

    I doubt seriouly that you are a CEO, and if you are, I will pray for you. Your statement alone tells how selfish you are as an individual.

    To all that have made posts, we are all to some degree in need of an additional stimulus check, and if we don't get one we will go on living and striving to make ends meet as we have thus far. I won't sling my bag of woes but I am in a financial bind as a single mom whose only child recently graduated from college. I'm not complaining as I am sure many are not they are simply stating the facts of life (their life).

    We just have to continue stretching what we have and not splurge when you do have a little I mean littel extra cash. Cook more often instead of eating out, sometimes I have to pay the minimum on a cc bill to make sure Ihave the gas/electric bill covered not to mention the oil bill (its been cold in NJ). Keep your head up, I do believe better times are coming.

  10. where is our money going? says:

    To : I believe in carma & ByFaith

    Im not a CEO of any kind (my wife, two kids and I live paycheck to paycheck) and it's very hard to live with the cost going up..im just an (extremely) annoyed average joe who thinks this whole mess is a joke!!!

    I really do hope government can wake up and see how many GOOD, HARD, AND ALOT UNDERAPPRECIATED Americans have to suffer because of this.

    I was just pointing out how a CEO might think about all this..That's all.

    Carma I hope you do stop for us if our car stops in the middle of no-where.

  11. where is our money going? says:

    To those who say, it's not your money, or why are you asking for a handout?

    Screw you!!!!!!!!!! True that we have to pay taxes (and we should NO ARGUMENT THERE) to live in the greatest country in the world! Right?

    But all im saying is, why do these government have to bail out these companies????

    Yes it will help unemployed people find, get jobs. But again they will suffer in the long run…with high cost of living!!
    You think these jobs are going to be six figure salaries…HELL NO they probably pay low hourly 8-10 bucks with double the work.

    Just my opinion…

  12. hollyinmichigan says:

    I think I would pick up a stranded motorist. With money or no money. Either way it was to help someone in need. If he or she was rich....I would hope to get a tip...lol. I read on the social security administration website that those of you who receive SSI get an extra $250 starting in may. Do you think that would help?...NOT really I would think. What would you buy with it? FOOD? CLOTHING to keep you WARM? PAY for bills? $250 isn't much for someone who lives on $674 a month. I am shocked at how little money SSI pays a month. No one surely can survive on so little. BLESS YOU to those of you who do get SSI....and still I wonder how you all pay for rent, let alone get something you want or heaven knows what you NEED.

  13. me says:

    a check would be nice..........but our government should stop bailing out these companies.... today its 10 mil next week its up to 20...so where does it end.... hard working people are suffering.... its crazy a ceo earns a 6 fig salary then gets a bonus of a mil plus. a month later his company is in washington asking for a hand out

  14. me says:

    I TOTALLY AGREE WITH THIS POSTING

    # Joe wesoloski Says:
    February 22nd, 2009 at 7:43 pm

    I believe the economy is like a tree. If you want it to grow you have to feed it. How do you feed a tree you ask. You feed it at the roots not the leaves like are Government is by giving the banks and big businesses bailout money!!!!!

  15. Wanda says:

    I think getting a stimulus check would be a better way to help out the struggling economy. It is hard to keep your head above water when the bills keep piling up. Not only that but when things break down, you have to replace them. The check would be much better for a now fix as opposed to a later fix. Many people can hardly pay their bills now.

  16. Geno says:

    Two things:

    1. When I read articles like this one that make statements that include "Government's money" I get sick. Some people are just so lost that they don't realize it's OUR money, not the Government's money.

    2. Putting money into people's hands is the only cure for all this. Some say create more jobs, and some say just write another check. Having the Government create jobs is a nightmare and will take WAY too long to have an effect. Write all taxpayers a check for 10,000 dollars or more, and see what happens. If I pay off bills, that helps out the banks and businesses. If I apply it to a new car, that helps out the auto industry. If I spend it on the kids, and family it helps out everyone. Even investing the money for the kid's college will help the banks bail out.

    I vote: Give me back $10,000 of MY money... TAX FREE!

    Geno

  17. Kristi says:

    not even sure this will help. i am nurse and my husband works for a great company
    we have 4 children. I got laid off a year ago cant find work!! my husband was getting 60 hours a week. but now he only getting 40, he make 1200 a week and the government takes 688.00 a week in taxes you know S.S Fed State ECT !!!!!!!! after we cover our medical insure we only get 488.00 dollars a week. that needs to pay our rent car payment food gas lights water sewer trash kids school cost!!!! We don't do credit cards. so yea the check would be nice!!! we pay more in taxes then we ever get back!!
    We work hard and here we are not able to take our kids to a movie or get them good shoes for school. why keep taking that 79.65 in s.s when i will not get it when i am older? Stop take so much of our money in taxes. and please send us a chenck that is more then 2008. with that check i paid bills with our return this year i have to do the same. We dont have money to buy high end things like we have in the past. maybe with a bigger check i could going shopping for cloths and shoes or a 2nd car. yea we had to sell one of our cars to help pay bills!!! sad when all my life I have work I have done my part and here I sit hoping my husband keeps his good praying i can buy food next week. What is wrong with this? WELL EVERY THING>>>>>

  18. Joy says:

    The only way that the new president can help our economy is to lower interest rates to 2% and to lower taxes to 1% percent across the board, for credit cards, mortgages, loans, sales tax, state tax and income tax. Put a cap on Utility companies,: electric, gas, water and sewer, telephone, (home line and cell). This allows us as consumers to stop paying out more money than is necessary on the items that we purchase and on the money that we work for. The banks will balk, the credit cards companies will balk, everyone will balk that is profitting from the consumer. This will cause all of the CEO's of these companies to not have all of the fantasy items that the consumer can not afford. Items like expensive cars, expensive homes, expensive vacation, expensive boats, expensive jewelry, expensive watches and expensive electronics. We the consumer are not buying these things, we are using our credit cards to keep food on the table and shoes on our childrens feet and clothes on their backs. The working class has always gotten the bad end of the deal. Think about it, this would help our economy, just lower interest rates and lower taxes. Once we stop paying out so much money in excess taxes and interest rates, then we can put more money into the system instead of some CEO's $100,000.00 salary. This would definitely stimulate the economy. Oh yes and do it right away don't wait until next year or next two months. Today is better.

  19. Jesse says:

    I guess self relinant is pissed.........he hasn't commented.

    To the other self reliant joker..........I bet it's a walk in the park to be you, huh?

  20. Jennifer says:

    oh ya i would spend it. i am wanting to make a move out of New Mexico so yes it would almost all go into economy. as well as i would be buying my kids some new bunkbeds and a new tv when we got there. money in hotels and maybe even get to take the kids to go see some cool things. go to disney land or something that i have wanted to do so long with them, New appliances possibly as well as able my kids to go to a school that does take care of my kids special needs. wouldn't that be great to see my special kids going to school in a different state where i can get the proper assistance for their autistic needs. but i don't have the stimulus so we are still stuck in New Mexico and it is a shame that we are living so tightly and in schools that are abusing my children. Such a shame. wether 1,000 or 10,000 it would help greatly to get better things for my children.

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