Senate passes stimulus plan

[chris]

MSNBC NEWS:

"The Senate passed an economic rescue plan Thursday that would speed $600 to $1,200 in rebates to most taxpayers and $300 checks to low-income people, including disabled veterans and the elderly."

The approximately $170 billion measure would rush tax rebates of $600 for individuals and $1,200 for couples to most taxpayers and cut taxes for businesses in hopes of reviving the economy. Individuals earning up to $75,000 a year and couples earning up to $150,000 would get rebates. People who paid no income taxes but earned at least $3,000 a year would get a $300 rebate."

What will you do with your extra tax refund this year?

[Kelly Girl]

ima getting a RMW tune-up thanks uncle sam!

[chris]

All eligible people would get an additional $300 per child.

Yeah baby....that's an additional $600 for me and the wife ;)

[Manticore1023]

mine's going to our wedding. :)

[Paul]

no money for me.

[chris]

no money for me.

Damn bro...you made that much? :cool:

[BLACK 1.8T]

Mine is going to credit card bills, even though the purpose of this stimulus check is put it back into the economy ASAP. :p

[chris]

Mine is going to credit card bills, even though the purpose of this stimulus check is put it back into the economy ASAP. :p

Yep...ours will be going onto our credit card and mortgage. :tup:

[Streamline]

I should pay off my credit card. But Stage 3 fueling is just too tempting :p.

[GTiGirl]

Wow, $600 a person. That should fix everything.





Dumbasses.

[DAVE_W]

making a couple extra payments on the MKV

[madajb]

"People who paid no income taxes but earned at least $3,000 a year would get a $300 rebate."

That's not a rebate, that's welfare.

Idiocy.

-ajb

[GTiGirl]

Anybody seen the movie "Idiocracy"? Now would be a good time to do so.

[GTiGirl]

“The population no longer relies upon social organization in the form of family, friends, neighbors, community, elders, children, but with few exceptions must go to the markets and only to the market, not only for food, clothing, and shelter, but also for recreation, amusement, security, for the care of the young, the old, the sick, the handicapped. In time not only the material and service needs but even the emotional patterns of life are channeled through the market…Individuals no longer know how to do what they formerly did for themselves.” – Harry Braverman

This is what they are hoping will happen with the funds.

[Paul]

lower income folks are less likely to spend money like this. More likely to pay bills or save it. Frivolous spending occurs more often by those with excess funds... this package won't give them a cent.

[Slapshotnerd]

Ironically, i'll be spending it in another country (Ireland)

[wikedgolf]

does this mean, i'll get back what i have to pay .. again :(

[RavinJetta]

Anybody seen the movie "Idiocracy"? Now would be a good time to do so.

We should give everyone Gatorade since it has Electrolytes

[Anonymous]

lower income folks are less likely to spend money like this. More likely to pay bills or save it. Frivolous spending occurs more often by those with excess funds... this package won't give them a cent.

I think those with lower income would be the more likely to spend it. They will look at this as a bonus and "treat" themselves by buying something they don't necessarily need. I don't see them saving much of it.

Those with excess funds, by definition, don't need a cent.

How would giving them more money encourage them to spend something they are already in excess of? If they were given a rebate I see them spending it on vacation or investing it.

I see more money going back into America when the money is in the hands of lower income people. Those with higher incomes are more likely to spend it on luxury items that more often support other countries.

Either way I don't think it will do much.

[A1pocketrocket]

How would giving them more money encourage them to spend something they are already in excess of? If they were given a rebate I see them spending it on vacation or investing it.


It wont! That is the 'theory' behind the bill and why they are giving it to the 'poor'.

I still think its a feel-good bill meant to put smiles on the faces of the stupid while doing what they can to polish the brass on the Titantic.

[protijy337]

if I make over 75K a year and am considered "rich" then why can't I buy a house, pay off my student loans????? (No car loans, don't live a crazy $$$ life brown bag lunches ect)

I call BS!

[kooz]

if I make over 75K a year and am considered "rich" then why can't I buy a house, pay off my student loans????? (No car loans, don't live a crazy $$$ life brown bag lunches ect)

I call BS!
+1

[Paul]

people who are truly in the poverty level or elderly will not spend this money. They barely have enough, it'll end up being used slowly over time. Most people will use the money to pay off bills, cc, whatever. True the wealthier folks don't need the money, then again they're also the ones paying higher taxes as well.

[protijy337]

I just dont like their definition if "wealthy"

[Paul]

hehe i don't think they'd use the term wealthy for those in the 75k-90k range in respect to this. in Cali (SD/LA/OC/SF/SB) 75-100k/yr income won't get you a house. Not unless you're in the boonies.

[madajb]

if I make over 75K a year and am considered "rich" then why can't I buy a house, pay off my student loans?????
Because $75,000 isn't "rich" in any meaningful sense of the word.
-ajb

[paultakeda]

This will solve nothing.

[jwill'sMK4]

so when should we start seeing this money cuz a brotha got bills...lol

[chris]

President Bush will pass the bill today. CNN showed his speach this morning and mentioned that the checks will be out by MAY :)

[SYNYSTAGLI]

hehe i don't think they'd use the term wealthy for those in the 75k-90k range in respect to this. in Cali (SD/LA/OC/SF/SB) 75-100k/yr income won't get you a house. Not unless you're in the boonies.

true story ;)

[TOYr32]

Wow, $600 a person. That should fix everything.





Dumbasses.

Well, I'd rather people working and paying their share in taxes get the money . . . versus the alternative, which was expanding food stamps!

does this mean, i'll get back what i have to pay .. again :(

HAHAHA . . . plus, you'll be taxed on it next year!!

if I make over 75K a year and am considered "rich" then why can't I buy a house, pay off my student loans????? (No car loans, don't live a crazy $$$ life brown bag lunches ect)

I call BS!

I wouldn't say BS, but you should be able to love comfortably, $75k single income, pushes you to get married so that you would have a larger combines income . . . and be able to afford what you want.

people who are truly in the poverty level or elderly will not spend this money. They barely have enough, it'll end up being used slowly over time. Most people will use the money to pay off bills, cc, whatever. True the wealthier folks don't need the money, then again they're also the ones paying higher taxes as well.

Last year I was renting for about $2k a month, owned a house, but because it was not my primary residence and the tax bracket we belong to, we weren't able to write anything off. We ended up paying about $6k in taxes. So, we bought a house, now pay $4k in mortgage . . . plus a little overflow from the mortgage down south. So we'll see if owning a home truly helps as a tax break. (oh, and we paid over $8k in property taxes between the 2 homes).

If the tax break is not up to par, we may have been better off staying int he apartment, biting the bullet for paying taxes . . . but we would have $3k extra month for spending ;) WTF!!

[jwill'sMK4]

President Bush will pass the bill today. CNN showed his speach this morning and mentioned that the checks will be out by MAY :)

aww my CC bills should be payed by then (hopefully) i guess that money is gonna go to a reward for me instead

[EDM]

Cool an extra $600 will be nice to have.

[chris]

Cool an extra $600 will be nice to have.

Sure will...I hope we get a lot back when we file as well :tup:

[JETTAone420]

so do vets get an aditional check added to the already 600$?

[1stKnight]

I heard about this "rebate" or "refund" earlier, and I honestly was not all that excited about it.

We all know that our Country (US) is already in a trillon dollar deficit, with the ongoing war effort, the Federal Funding of relief for all of these recent and unfortunate natural disasters and the Mortgage Lending meltdown to name a few. As a taxpayer, I have no objection with providing my support to all mentioned, with the exception of the mortgage relief. Many knew and were just plainout going way over there heads during this housing boom. I personally think that pure "Greed" was the ingriedent to this financial mortgage mess. It was so obivious, that even an ecomomics student could have foreseen and predicted this meltdown. Similar to the rise and fall of the technology stocks in the early 90's....Ohhh my... history has a tendency to repeat itself.....

So, one has to think where all of this money is actually coming from. Not from Walmart, LOL. It is to my undestanding that all the extra money is, in as much as coming from our "own" Social Security Fund? If that is true....Hmmm.

In addition, to my retirement portfolio, I just hope that there will be money in Social Security for all that who will retire someday.

and that's my 3cents...

[paultakeda]

It's called, "Here! Look! Free money! Distracted yet?"

Don't depend on social security -- it's broken. Max out the 401k and start up a universal life insurance policy.

An extra $600 won't even cover a single mortgage payment for most who need to bail on their houses due to the sub-prime fiasco. An extra $600 per person will cost the government millions to organize and determine who gets what, cut the checks and pay for postage. It is a feel good maneuver to distract the population and convince them that by you spending this money the economy will recover.

Enjoy the cash.

It solves nothing.

[GTiGirl]

Here's a cool article written by my friend Suze Orman:

"Stash It, Don't Cash It"

Posted on Friday, February 8, 2008, 12:00AM
By now you've heard that the latest economic stimulus package has passed both houses of Congress, and is set to be signed by President Bush this week. If you're in line to get a sizable rebate check in the mail this spring, think twice about doing what the government wants you to do with it.

Stimulating Savings

That's because if you're planning to use your Washington mini-windfall at the mall or a car dealership, you're playing into the government's theory that your spending will stimulate the economy and all will be well. Or at least all will be better.

I don't agree with that approach on any level. The economy isn't floundering because we aren't spending enough; it's floundering because we're spending too much, largely on credit. So do the opposite of what the government is hoping for -- it's far more important for people to boost their savings, not their spending.

Help Yourself First

You read that correctly. The rebate you're about to get should be saved, not spent. It should be used to pay down debt and build up an emergency savings account. What you need to focus on is not what your government wants you to do for the national economy, but what you can do for your personal financial security. Help yourself first.

Does that seem unpatriotic? Please. If you listen to Washington and spend the rebate, and we still slide into a recession and you get laid off, don't count on extended unemployment benefits to help you weather the storm -- that provision didn't make it into the stimulus package, despite Senate Democrats' efforts to include it in an extended bill. You get my point: What Washington wants you to do for the economy isn't necessarily the best thing for your personal security.

The better move is to use your rebate to build your finances. If you've got credit card debt, this is your chance to put a big dent into that unpaid balance. Right now, the stock market is taking us all on a roller coaster ride, but if you pay off a credit card balance that's charging you 18 percent interest you give yourself a guaranteed 18 percent return on your money. Even when stocks are on a bull run, it's hard to get that kind of a return.

Sock It Away

Next up is an emergency cash fund. Seriously, if you haven't paid attention to this advice in the past, pay attention now. A weak economy and a volatile stock market make it all the more important to have some money socked away in a risk-free account.

Of course, with the Fed's 75-basis-point haircut, interest rates on savings accounts are slipping. At the same time, however, banks are so starved for deposits that they're doing all they can to offer strong rates.

If you're convinced rates are going to be coming down even more, consider putting a portion of your savings in a 6- or 12-month CD. You can still find rates north of 4 percent if you act now. Shop for the best deals here.

Make It Work

If you already have an emergency cash fund in place and you don't have credit card debt, you still shouldn't spend the rebate. Invest it for the long term and you can easily increase the value of your rebate five-fold.

For instance, say you're married and have three children; if you meet the income cutoffs, you could be in line for a $2,100 rebate according to the stimulus plan. Invest that $2,100 in a Roth IRA and in 35 years it'll be worth about $34,000, assuming an annualized average 8 percent return.

Is blowing $2,100 today on a plasma-screen TV or a long weekend at Disney World worth the opportunity to add about $34,000 of tax-free money to your retirement stash? I don't think so.

A Jumbo Change

The big news in Washington's stimulus package is that it will sharply increase the dollar limits for what qualifies as a conventional mortgage and what gets tagged as a "jumbo" mortgage.

Right now, mortgages for more than $417,000 are considered to be jumbo loans. The major government agencies that "guarantee" mortgages aren't allowed to touch loans over this threshold. That's had a chilling affect on for mortgages amid the subprime fallout; banks are finding it hard if not impossible to find anyone willing to buy jumbo mortgages in the secondary market. To get investors willing to bite, lenders have raised the rates on jumbos about 1 percentage point above the going rate for a conforming (less-than $417,000) loan. Right now, the national average for a jumbo 30-year fixed-rate is about 6.5 percent, compared to 5.4 percent for a conforming loan.

But jumbos are about to get a lot cheaper: Washington's package includes raising the amounts that qualify as conforming, non-jumbo loans. Fannie Mae and Freddie Mac could see their loan limits for 2008 raised to a maximum of $729,750 in high-cost metro areas; FHA-backed loan limits up to that limit would be permanent. Once the stimulus bill is in effect, plenty of people paying an expensive jumbo will be able to refinance at a lower rate.

But just because you can get a lower rate doesn't mean it'll automatically save you money in the long term.

Refi Rumples

Let me explain. A $600,000, 30-year jumbo mortgage taken out a year ago at 6.4 percent costs $3,753 a month. Let's assume that once the new loan limits kicks in, it can be refinanced into a 5.4 percent mortgage. The monthly tab would be just $3,370, or a monthly difference of $383. That's an annual savings of more than $4,596.

What people never seem to focus on is what will it cost to refinance. First, there's the fact that you may be hit with fees that can easily add up to 2 percent or more of your mortgage amount; even if those costs are rolled into a new mortgage, you're still paying for it -- and paying interest on it, too.

So before you rush to refinance, slow down and think through your plans. If you intend to stay put in the house for a few years, the cost of the refi will eventually be offset by your monthly savings. Use this calculator to find out how long you need to stay in your house for the monthly savings of a refi to offset what you pay in fees. And carefully read the fine print in your existing mortgage to find out if you're going to be hit with a prepayment penalty -- these fees became all too popular during the housing mania. If you're stuck with a prepayment penalty, add the cost of it into your calculation.

Timing Is Everything

The other big refi mistake people make is refinancing into a new 30-year mortgage even though they're already 5, 10, or 20 years into paying off their existing mortgage. Even though you're paying a lower interest rate on the refi, there's a good chance your total interest payments from what you've already paid on the existing loan and what you'll pay on the refi loan will add up to a lot more than if you just stuck with the original mortgage.

Aim to refinance into a mortgage term that will keep your total payment period to 30 years or less. For example, if you've paid off 5 years of your existing mortgage, try to refinance into a 25-year mortgage, not a 30-year one. You can run the numbers using this calculator.



http://finance.yahoo.com/expert/article/moneymatters/65848

[mike]

This is what pisses me off, I won't get one, because I make too much, even though I pay more in taxes, property taxes, capital gains taxes, B.S. Second, Its not going to "Stimulate" the economy, most of the people who are getting this, will use it to pay off debt or bills, not go out and reinvest it in the economy in the means of merchandise. It will buy food and diapers for the poor, and pay off bills for students and people who make slightly more than the poverty line. Other people who have established themselves may buy something or save the money, but eh, I think its a large welfare move on the part of the government. People who make less money and have kids, pay less taxes and get money back, screwy IMO.

[mike]

Great article your friend wrote. Good points, but will mostly fall on deaf ears of people who are going to think of it as "free" money.

[GTiGirl]

Great article your friend wrote. Good points, but will mostly fall on deaf ears of people who are going to think of it as "free" money.

She's not actually my friend :) She's a pretty prominent financial advisor; she also writes books, blogs and has a show on CNN Money. But we've become great friends over the last year ;) I seldom disagree with her advice!

[BexSoCal]

What will you do with your extra tax refund this year?


Nothing!!!! I make too much to qualify for it.
grrrrrrrrrrrrrr!!!!!!!!!!!!!!
:doh: :doh: :doh: :doh: :doh: :doh: :doh: :doh: