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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. Geraldine says:

    im looking for a 1040A tax form. Can someone tell me where to get one?

  2. Jesica says:

    Geraldine,
    Just go to the irs.gov site and look under forms and publications and you can print it out from there.

  3. shamika says:

    hey all im just lost with the stimulus talk the only thing i ever wanted to know is if obama is going to represent for the people who got him there or if hes going to turn his back like bush

  4. Summer says:

    I agree with the larger stimulus check. I am a member of a low income family and it would help me get out of debt and be able to actually spend my paycheck on frivilous things instead of payments to all the creditors i owe. I would help alot of people probably maybe even keep some from having to go to welfare and food stamps, like me. Im at my wits end trying to keep my head above water. Me and my husband both have jobs. But we cant seem to make ends meet with the high cost of food clothing our 3 kids creditor bills doctor bills and housing costs. We need help fast, not some dumb plan that might help us in a couple years or so.

  5. Kimmi says:

    What happens now? I really need this money to get back on my feet!

  6. L Johnson says:

    I would really appreciate receiving another Stimulus refund check. It's very easy to oppose this idea for someone who isn't finacially strapped. However, the poor will only continue to suffer and crime rates will continue to rise. I feel everyone deserves the chance of happiness and dignity and not to have to live from paycheck to paycheck. We have a long road ahead of us, because some of us feel it's OK for others to be able to survive off little or nothing while they live the life of Riley. Prior to Pres. Obama's election he made a lot of promises to the American people which has since changed, and what he is now offering is "Long Term' promises which is really nothing (a dollar here or there). I feel $10,000 is not enough, however it's a little help but technically it's not enough. "The World Is A Ghetto".

  7. tracey says:

    i think that we should get a stimulus check it will help us out a lot,i have 2kids and i'am
    single parent tryin to make it help us please...

  8. tracey says:

    i just want my kids to have the best in life there honor roll kids we have been through a lot.

  9. aclassalone says:

    TO SELF RELIANT: you say PATHETIC, PLEASE...and you think no one is smarter than you, and that they havent done the things you say you have done, and yet you call them dumb or ignorant in financial responsibility, i call you naive---no i am not saying we all need a handout, but for the ones who do what you have done and LOST THEIR JOB TO A COLLAPSING ECONONY so that CEO jobs, degree jobs, banks, oil company's are letting people go left and right, being on jobs for YEARS THINKING it was a secure position, having a lower house payment---not the dream home they wanted--having one car and buying a second hand car for $2,000.00 HAVING THEIR IRAS wiped out IS ALL THEIR FAULT OF POUR PLANNING---PLEASE...who's pathetic!!!!

  10. Melissa7691 says:

    I am sure President Obama knows what he is doing but, I can sure use a stimulus check. Indebt single mother.

  11. Sydnie Crawley says:

    Well well,I guess the big hope party is over,it was great to be black a few months ago....but have we made the right choice?...how could a president who is supposed to be so in-touch with the REAL people,why on earth does he think it's ok for our stimulus package to be split up over time when the big wigs on wall street got theres in full...we need to PAY OUR BILLS TOO!!!

  12. Delia says:

    I want to ask you'll the money you'll got last year for stimulus check did they charge you back the amount when you filed your tax return? The reason I'm asking is because I was suppose to get back $3000 and the person that did my tax return ask if I got $600 stimulus check adn I told her yes and then she decucted that from the amount and I only got back $2400.. Thank you for all your help.

  13. VERA says:

    why is the goverment giving you a stimulus check then turn around and take it tight back for child support and student loan debts its not fair don,t even tell me about it if you are going to take it anyway

  14. Here E! Here E! says:

    I think Mr. Obama should do what Mr. Clinton done, and that is bring home the troops, then help out with the economy, by sending us a stimulus check worth the harder workers money. Heck we paid it why not give it back to us!

  15. Jessica says:

    Ok so what I want to know about this how stimulus thingy is What if you haven't/don't work all year in 2009...Do you get any kind of stimulus payment or do we just get nutta. Like a friend of mine works and her is going to be going in her paychecks to lower the taxes they take out, and another friend who is on disabilty is getting a check...But what about me??? Will I be getting anything at all??? Can any one please answer this for me thank you.

  16. Aliree P says:

    I think it would be smart to hand us $10,000 What would I do?? I would put a down payment on a house. I have no debt of any kind so I could put the whole thing towards a house!!! That will never happen though, because in american you only get rewarded if you are already rich. When did america stop being a democracy??? I thought the people in goverment were suppose to represent the people???

  17. Morgaine says:

    I know how you get people to spend a stimulus check on goods. Give them a Visa Gift card!

  18. Crystal says:

    I just wanted to say this is awful! I feel the money would have helped the economy more if it was given to the people. It would also have helped if the checks were more than before. All of that money that went to these companies could have still went to them. Just from ourselves, investing or things of that sort. Come on now. . . . Was all the money really used for it's purpose? Basically the way I see it is: if the government gave it to us, most of it still would have ended up going to consumers. Only because, Americans have to live, right?

  19. AL says:

    Now did anyone think the banks and mortgage companies, once they received our tax dollars would do the right thing and begin to ease the depression/recession by loaning it out or building new plants here in America? If you were fooled by that rhetoric which was spewed out early on by the politicians, then you were the real fools. To have your money stolen and given to others who could care less about you is one thing. But to willingly give your tax money to others while you are starving is complete foolishness. Those of you who believed in the current band of merry-makers who reside in Washington DC when they were up for election last November are the real fools. Ever hear of someone smiling in your face while stabbing you in the back? Did you think you would get the change you could believe in? Did you know what change you were even voting for? The thugs in DC are in cohoots with big banks and big business. They rely on the kickbacks they receive from said same in order to grow their Swiss bank accounts. The poor underbelly of Americans on the other hand have nothing to offer the politico's other than their vote which seems so easy to obtain by thinly vailed lies which they put forth during the longer and longer campaigns proceding each election. We are the fools. All of us poor working people who fail to demand real change. I'm talking about the ouster of both parties and move towards independant candidates who aren't connected to the system in any way prior to taking office. $1000 or $10,000 will not solve your problem. Only truthful and honest leaders who represent the real interests of us who elect them will suffice. Don't be fooled again next year when the same run of the mill bunch in Congress beg you for their vote with promises of the moon and stars in exchange. Sure, I'd like a check in my pocket the same as any sane person would. But just like I know robbing and stealing is illegal and has consequences, I know that unless we get those who are supposed to represent us inline, we will not solve what really ails this failing nation. Think about most everything you buy as being made in some foreign land, because it is, you know. And without manufacturing being done here in America our future is nothing more than government hand outs. Our future is dim indeed, when we've come to rely on handouts for survival. I agree we must survive short term and maybe the stimulus check is necessary. But we also need a solid game plan going into tomorrow. And I don't see one on the horizon.

  20. Amanda says:

    What is the deal? I've been told stories that we are getting the checks then I'm getting told we aren't and I'm a parent with two kids and I'm in debt beyond belif. Im also on the verge of losing my car so the government needs to get there s**t straight. When will we get a check sent out? And are we getting one or two?

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