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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. Mrs.Newkirk says:

    All we can do is PRAY!!!! I can't believe people are fighting over the possibility of getting a stimulus check. Who cares about the amount, every little penny counts. This is what the voters get for putting Obama in office. You all made you're choices, now live with them. Stop b*tching about stupid stuff, you should be more concerned about what YOUR president is doing to screw up everything worse then Bush ever could have! PRAY PRAY PRAY, thats all we can do now.

  2. TENA HOLLOWAY says:

    OK I'VE BEEN THINKING ABOUT THIS PLAN THATS ON ITS WAY AND I CANT UNDERSTAND TO SAVE MY LIFE WHAT IS GOING ON .WE ARE THE ECONOMY AND WITHOUT US AS TAXPAYERS THIS PLAN IS GONNA BACK FIRE ONLY BECAUSE IF THEY BAIL ALL THESE COMPANIES OUT AND WE ARE STILL SINKING HOW CAN THE COMPANIES STAY AFLOAT SINCE WE ARE THE ONES SPENDING WE WONT HAVE ANYTHING TO CIRCULATE OUT HERE . I SAY GIVE US THE MONEY AND WE WILL GET IN GOING THAT WAY WE BAIL THEM OUT BY SPENDING CAUSE IF NOT WITHIN THE NEXT COUPLE YEARS MAYBE EVEN MONTHS THEY WILL BE RIGHT BACK BROKE CAUSE WHOSE GONNA GO OUT AND BUY A NEW CAR OR APPLY FOR A LOAN OR TRY TO GET A NEW HOME WITH NO MONEY .... WE ALL ARE GONNA BE IN BIG BIG TROUBLE

  3. blondladywolf says:

    we all need to just forget about the check's AND STOP WAIT ON THE GOV TO HELP US and just make end's meet i make 14.000 WOW i work at a mall clean for billairs and no matter how hard you work all they do is want more let's not get like them we all no rich one's out there would never make it out there working there a** off and that don't mean siting behide a desk we no we will yes i im 2 month behide on my house just cought up on my car now i got my bill's to pay light water gas ect that r do NOW i im not wait for the gov to help me if i did omg so i make it pay check to pay check just like all of you im not going to let the gov bring me down i wil just keep making it pay check to pay check we need to step up and make it any way we can and that dont mean go kill or sell drug's all of us that have job's be thankfull you have a job no matter your hr's and you that can work take what you can it put's food on the table and you that can't work that r hurt the gov should help you and us that work thank god they did not take out of r pay check or we all would real have been screwed

  4. Gwen says:

    I'm all for another round of stimulus checks. I think the money should go to the taxpayers that are hurting the most, not the Bank Presidents and CEO's of major companies that are spending everybody elses money on themselves and their families. We need it the most. We are ALL trying hard to pay our bills with inflation taking more of our paychecks just to stay afloat and most of us end up sinking with all our effort going to waste. Yes I promise to spend mine. And if there is a big worry, they can send me two and I promise to spend that one also! I also promise to spend the entire 1,000 or 10,000 dollars! It wouldn't be that hard to do considering the price of gas keeps going up along with food and other necessities. Heck I will even promise to do something extravagant like go on vacation for the first time in 10 years! SHOW ME THE MONEY!!!!

  5. Shelly says:

    I am the mother of 2 boys and a wife, with the economy the way it is a bigger stimulus check would be greatly appreciated! We spent all of the check last year and would definately spend it this year. Even if it was the same amount as last year something beats nothing, at least when you have the check in your hand it gives you the chance to do something for your family, if they give it to the schools, or the state our taxes, gas , food and everything else keeps going up, the extra money helps. Like I said something beats nothing!

  6. Carol says:

    I think that a stimulus check is a good idea. But I also think that if they are going to call it a stimulus check, shouldn't it stimulate you when you recieve it? The first round of checks, not enough to matter, went to everyone to play catch up on some small bills. If I have to be in this rat race, I don't want to just catch up , I want to stop for a shopping spree on the way.

  7. shirley says:

    I think we all could use 10,000 check right now food prices keep going up like everything else. It sure would come in handy and i sure would spend it , My stove quit working 10 months ago no oven and 2 burners in front quit i'm cooking on back burners i can never get to save anything with my mortgage over 800.00 a month besides all the ulities. I just can't do it on a low income on social security i sure could use it like everyone can.It would be nice to get a check no matter what and yes i would buy a new stove and pay off some bills . Last check was too small to really do what you need too do. But i appreciate it it helped out a little.

  8. Shelby says:

    My bills are my private hell.. but this is where I feel the Auto Industry and Banks should have the same accountability! So my personal opinion is that if THEY think they are desrving of a bail out.. I think I am too.

  9. CHERYL says:

    I cant believe that this is even up for discussion. There are so many families right now that need money in their pockets. I think that a check for $10,000 is the least they could send. I mean all they are actually doing is giving you your own money back as taxpayers. I watched on the News where there are good American families living in tents. They have lost their homes, jobs and money. I cant believe that the man I voted for that was going to "Change" everything wont. Now, Im not saying he wont but he really hasnt yet. People are so worried about the investing and the banks and the stores and the housing markets...well, if people had money they could invest, shop, get financing for cars and homes but if your are broke ..living in a tent and people tell you well, you wont go to Wal Mart if I give you another check .Thats insane to me. I mean everybody goes to Wal Mart...Right? Come people in carge..Do the right thing and help us out!!!

  10. Leslie says:

    I agree about the $10,000 I am a single parent working at a part time job.My little girl is only 15month and that means I still have to buy pampers.My bills are about $550 a month and I clear like $700. So i would not be about to do nothing with $1000. I want the best for my little girl just like any other parents. Obama i eally hope you think this over again. I hope you'll do the right thing for us parents that struggle day by day. Not everyone want to live off HUD for ever.

  11. CHRIS says:

    I am recently unemployed.Life for me has been tough these past couple of weeks since i had my unemployment benefits frozen due to a vindictive employer i used to work for.Anyway i believe that stimulus checks up to 20000 are reasonable because then everyone would clear their debt,and then you will see the economy get back on track.You see the backbone of this economy is the working individual,and if the individual is debt free everything will be back to normal,but this will never happen because this evil govt will not allow it due to the fact that they have to accomplish their corrrupted policies and therefore the people cant rebel.WAKE UP EVERYBODY THIS COUNTRY IS ON ITS WAY OUT AND WE AND OUR CHILDREN ARE GOING OUT WITH IT

  12. Jennifer says:

    A dream come true thats all i can say. For a single stuggling mother of two beautiful girls. Having a larger stimulus check would help me with providing wonderful things for my kids! I can only hope this dream comes true!!!!

  13. Tammy Winters says:

    I do agree that If we all that really need are checks we were promised, and me and my daughter got 10,000.00 each. If everyone Is thinking the same way I am that money would go to helping the economy. I am thinking of the important things to boost peoples busnisses. I need some work on my house. T-hat means I need to hire a contracter. We need more food, that means spending more money at the store. We need a car. -I would be at a dealership buying a car. These are things that are going to help the economy. But we need the money to let this happen. I have heard people talking about buying goverment houses, and fixing them up for property. that helps there income and boost the economy. Helping people catch up there mortgages so they do not lose there home. Beleive me If everyone gets there stimulis checks, the econimy Is deffenitly going up. I have heard to many people talking about wanting our people get out of this defecint and get on with our lives. Nobody wants to see another depression. I am sure I can talk for a lot of people when I say this Is what we need and deserve. I am on social security and disability. I have an electrical problem with my house. Ido have 2 mortgages. The electrition said my house could catch fire. I have a big family, and I am scared. I do not have the money to fix this. Please help your people come above water before we all drown. Hope everything works out. Thanks Tammy Winters.

  14. super_psycho_mom says:

    Okay, so there will not be a stimulus check from the Obama administration -- at least there is none planned as of now. Wat if there were a way for us to get this entire thread into the hands of Obama and Congress? Would they read it? Would it change their mind? Anybody got any ideas about how to get that done?

  15. yvonne says:

    I am a struggling single mother and am sitting in the cold as i write because i cannot turn up my heat. Can't afford to. I have a daughter who is in college who also works and has been struggling since she began her studies. Am hoping she will be able to find a job when she graduates. Like many of the other single moms who wrote in, my ex doesnt make it a priority to help our daughter so it falls on me. i work a second job and recently had my hours cut. i feel blessed to still be working but never imagined it could get this bad. Its obvious by some of the comments posted that some people just do not understand what it feels like not to be able to buy food or heat and have to do without in order to survive. So yes i think a second stimilus check is necessary and would be helpful. For some of us it will make the difference between sinking and floating.

  16. Raymond says:

    President Obama seems to be the most tech savvy President we've had in a long time. He's already proposed using mediums like Youtube to disseminate his speeches and announcements to the American public. It would be quite neat and innovative if he were to ever attempt to engage the American people in a town hall style live IM conversation where people could instant message in their questions and concerns, and have the President read them as they came in, with time for him to respond to a few of them. Of course the actual logistics and management needed to effectively run something like that seems rather prohibitive. Plus, I'm not sure it would really do any good in terms of changing what he's already doing. I think Obama already knows that many in the public are clamoring for a second round of stimulus check payments. I'm not sure that will happen any time soon, unless the current 2009 Obama economic stimulus package fails miserably, and an emergency financial boost is demanded.

  17. chris says:

    Our govermnt is leting big bussness screw us...all they care about is keeping money in there pocket, wile we suffer.... i grow tired of hearing how the owners of the big companies fire every one and keep there six fig bounse...what the HELL, then the goverment gives them more money.....
    I SAY WE REVOLT take our country back, the big companeis are selling us to the highest bidder, wile our kids starve... and we sell them into debt...
    our goverment has failed us... wile the poor pray to god the rich pray to the doller...

    DOWN WITH OUT GOVERMENT< and up with the working man, and middle class

  18. yamile says:

    i think is a good idea for a second stimulus check, i'm a single mom cant afford to buy a house for my kids and i, i would love to take them on vacation. I think obama should fight for all citizens to be entile to receive $10, 000 per home to spend it without a dought. These monies will stimulate the economy for sure. I know exactly how i want to spend my money.

  19. pat says:

    Many senior citizens cannot afford to heat their homes, buy food or prescriptions, they also need a check that is more than 250.00. This hardly buys anything they need. So don't exclude the seniors in this, it is just as hard for them to live if not harder with no special credits for having children.

  20. Dorothy A.Belanger says:

    Dear President Obama,
    Please consider something in a stiilus check for the elderly.My Husband and I are in our seventies and have a hard time makeing ends meet. We have not seen our children in two years and that was to go home to bury one our sons.We would love to go home only this time for a pleasure .Please between you and former Pres. Bush all the stimilus money has gone for businesses that have gotten themselves into trouble.
    We the people especially the seniors deserve more than a $300.00 0r $600.00 check for couples.PLEASE PLEASE PLEASE give the seniors a little something
    Sincerely
    Dorothy A Belanger

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