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2009 Stimulus Package Passed – Was There A Stimulus Check?

The 2009 stimulus package bill has been very controversial because nobody knows for sure how much stimulus is needed to get the economy back on track or what form the stimulus should take.  A stimulus check 2009 giving cold, hard cash to the population would certainly be a popular choice but it looks like tax cuts and infrastructure spending will make up the bulk of the stimulus package.  There will however be a $250 stimulus check in 2009 for selected groups.

Let’s take a look at what this bill contains and what was left out:

Tax cuts

This is the 2009 equivalent to the stimulus check of last year – Tax cuts in the order of $400 for individuals and $800 for couples.  This is a bit less than the original stimulus tax cut proposals of $500 per individual and $1000 per couple.  This isn’t as exciting as receiving a stimulus check in the mail but is basically the same thing since it means more cash in your pocket.

$8,000 tax credit for first-time home buyers

This tax credit was originally planned to be a $15,000 tax credit, however it has been reduced to $8,000 which is still a pretty good break.  The tax credit is not a loan so it doesn’t need to be paid back.

This tax credit applies to any houses bought between January 1, 2009 and November 30, 2009.  To qualify individuals must make less than $75,000 and couples must make less than $150,000.

Infrastructure spending

A good portion of the approximately $800 billion package will go to infrastructure projects such as schools, highways, energy and technology projects.

Tax break on AMT

$70 billion of this package will be going towards allowing millions of middle-class Americans from paying the dreaded AMT (alternative minimum tax) which was originally intended to prevent higher income Americans from avoiding the payment of any income tax but due to inflation creep – is now applicable to lower salaries.

Limits on Wall Street bonuses

This applies to financial companies that are accepting government bailout funds.  The rule is that any bonuses for executives can’t be more than 1/3 of their regular salary.  The other catch is that the bonuses have to be paid in company stock which doesn’t vest until the government bailout money is paid back.

I think this is a great idea – these executives are the ones who took too many risks in the first place so reducing their pay makes sense to me.  One could argue of course that maybe those executives shouldn’t still be in charge but apparently that is the case.

This measure will only work in the short term since any new executive contracts will have much higher base salaries if the stimulus limits are applicable.  Hopefully there won’t be a slew of “new contracts” for various executives with higher base pay.

$250 stimulus check for select groups

There will be a $250 stimulus check for select groups.

Update –Will there be a stimulus check in 2010?]

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Economic Stimulus Tax Cut Package 2009

President Obama has proposed an economic stimulus tax cut package for 2009 which contain about $275 billion  worth of tax cuts to individual tax payers as well as businesses.  The big question is – does this package contain a stimulus check in 2009? The idea behind this money is to promote  individual spending as well as business spending and job creation.  The large amount of the tax cuts is  partially due to the need to get Republican support for stimulus package.

Is there a stimulus check in 2009?

There will be a stimulus check in 2009 for selected groups – however there won’t be a blanket check for all taxpapers like there was in 2008.  However – the year isn’t over yet and the economy hasn’t recovered so don’t give up hope – the stimulus check could happen this year.

What is an economic stimulus package?

In 2008 the government sent out economic stimulus checks to 130 million Americans with the idea that this money  would be spent on consumer goods and services thereby stimulating the economy. Most economists think that this  program was not successful because too many people either saved their stimulus check or paid down debt.   Regardless, the economy has slowed down into a recession with the possibility of a depression which has increased the motivation for another stimulus package.

Individual tax cuts

Obama has proposed tax cuts of $1,000 for couples and $500 for individuals.  This would apply to individuals  with a maximum income of $75,000 and households with a maximum of $150,000 in income.  This is similar  to a stimulus check except you would receive this amount over time rather than all at once.  The idea  behind tax cuts for individuals is to promote spending which will increase economic activity.  More economic  activity is good for the economy and will help fight off the recession.

Business tax cuts

Here are some of the proposed business tax cuts:

  • Tax credit for companies that avoid layoffs or make new hires.  I would assume that if they have offsetting  layoffs and new hires they wouldn’t get any credits.
  • Allow companies to write off losses from 2008 and 2009 to retroactively reduce tax bills from the last 5 years.   Normally these companies would only be able to write off the losses on current or future tax bills.
  • The tax write offs would be effective from Jan 1,2009 so any expenditures since then could be included in the  tax loss.

Second economic stimulus check

At the moment Obama has not proposed a 2009 stimulus check like the one that was sent out in 2008.

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Will There Be A Second Stimulus Check In 2009?

The question all Americans want to know is whether they will receive a late Christmas present this year in the form of a 2nd economic stimulus check.

In 2008 the government sent out economic stimulus checks to 130 million Americans with the idea that this money would be spent on consumer goods and services thereby stimulating the economy. While the program was considered a success by some – it didn’t prevent the economy from slowing down into a recession with the possibility of a depression.

President-elect Obama has proposed an economic stimulus package for 2009 which will total almost 1 trillion dollars – or about $3300 for every single American.

Second economic stimulus check

So far there has been no mention of any stimulus checks (like in 2008) however that doesn’t mean it won’t happen. Nothing has been approved or finalized so it is still possible. If a second economic stimulus check is going to happen in 2009 it would be more likely to appear later in the year if it looks like the initial stimulus efforts are not doing enough to get the economy going.

Stimulus tax cuts

Obama has proposed stimulus tax cuts of $1,000 for couples and $500 for individuals. If this passes, it might be the closest thing to an actual stimulus check that most Americans will receive in 2009. This kind of stimulus is not as much fun as getting a large check all at once since it would take the form of reduced withholding taxes on regular paychecks. However, in the end – extra money is extra money.

Emergency Energy rebate

One of the more controversial initiatives is an energy relief plan to help Americans pay their energy bills this winter. The $1,000 emergency energy rebate would be given directly to Americans and would be paid for by windfall profit taxes on the large oil companies.
This particular initiative might not have much of a chance given that with the rapidly dropping price of oil, home heating costs are going to be a lot lower than initially predicted as recently as a couple of months ago.

Infrastructure stimulus spending

The Obama stimulus plan is calling for a huge investment in roads and bridges and mass transit improvements. This will total $850 billion over 2 years. This portion of the plan is the main driver behind the goal to create 2.5 million jobs over 2 years.

$250 stimulus check for select groups

There will be a $250 stimulus check for select groups.

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When Will You Get Your Early Economic Stimulus Rebate Check?

“When will I get my economic stimulus rebate check?” is one of the big questions that Americans are asking themselves at the moment. Actually I’ve been asking that question as well but I’m not holding my breath for it!

The economic stimulus checks started on April 28 and will continue through to mid-July of 2008.

The schedule for people who filed their taxes by April 15 is based on the last 2 digits of their SSN – Social Security number. If you filed jointly then the payments will go out based on the person listed first on the return.

IF YOU USE DIRECT DEPOSIT

Last two SSN digits: Payments will be transmitted no later than:
00 through 20 May 2
21 through 75 May 9
76 through 99 May 16

IF YOU WILL GET REBATE BY MAIL

Last two SSN digits: Payments will be mailed no later than:
00 through 09 May 16
10 through 18 May 23
19 through 25 May 30
26 through 38 June 6
39 through 51 June 13
52 through 63 June 20
64 through 75 June 27
76 through 87 July 4
88 through 99 July 11

If you couldn’t get your act together to file your taxes by April 15 (but you did file since then right?) then you will get your rebate about 2 weeks after the scheduled date. You need to file your taxes by October 15 in order to get a rebate this year.

Here is the IRS online calculator to figure out how much your rebate will be.

If you are confused about whether this rebate is actually a loan then this post should clear things up.

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2008 Stimulus Check

A while back, the US government decided that the US economy was in danger of sliding into a recession. Traditionally, one of the methods to prevent a recession or to minimize the impact of an economic slowdown is for the Federal Reserve bank to lower the federal funds rate which indirectly affects the prime rate – a number which affects consumer and business loans. The purpose of lowering the rate is to make it easier for individuals and businesses to borrow money and spend it on consumer goods or business spending which will help increase economic activity.  Another method is to cut taxes to stimulate the economy or create a stimulus check.

Fed policy 2008

So far in 2008, the Fed has decreased the federal funds rate from 4.25% to 2.25% – a drop of 2% over two months which is quite dramatic and indicates that the Federal Reserve is deeply concerned about the probability of a recession. The head of the Federal Reserve, Ben Bernanke, is a student of the Federal Reserve policies of the great depression and believes that Federal Reserve actions at the time turned an ordinary recession into a major depression. One of the key actions of the pre-depression Fed was to keep rates high which ended up choking the economy into a depression. Needless to say, Bernanke is quite keen to avoid the second great depression which is why he has acted very quickly to loosen the money supply and avoid the same mistakes made 80 years ago.

2008 Stimulus Check

Starting this week, US residents will start receiving money from the government in the form of an economic stimulus check”. This money is a plan by the government to give money to Americans so they can spend it and help stimulate the economy. It will be interesting to see if this payout has any effect on the US economy or it if can even be measured accurately.

Why doesn’t the government just spend this money itself? This is what normally happens with government money, however it’s an election year in the US and like everywhere else in the world – politicians like to buy votes! In theory it shouldn’t matter whether the government spends money on infrastructure projects or gives it to the voters to spend on big screen tvs, either way the money gets into the economy. It’s much quicker however, for consumers to buy big tvs and go on vacations than it is for the government to plan for and implement it’s own projects. Also, someone who is enjoying election night coverage on their brand new high definition plasma tv might be more inclined to vote for the party that bought the tv for them.

What to do with your stimulus check?

I don’t think the economic stimulus package will really do much good or much harm – and since it’s already a done deal, then my opinion doesn’t matter too much. If you are a recipient of some stimulus money then don’t listen to all the government propaganda about how you have to waste this money on consumer goods and vacations. It’s your money and you should do whatever is best for yourself and your family.

My suggestion is to apply the stimulus money according to your current financial plan. If you are working on paying down debt, then pay off some debt with it. If you are putting all your extra money towards retirement savings, then that’s where the stimulus money goes. If you happen to be savings for a big tv or vacation – then by all means, apply this money for those purposes since that’s what your financial plan calls for. If you don’t have a financial plan then put the money into a high interest savings account and create one!

How much are these stimulus checks?

The basic payout is up to $600 per adult and $300 for eligible children under 17. There is an income limit so if you make over $75,000 (adjusted gross income) then the rebate gets reduced by $50 for every $1000 of income earned over $75,000 which means the maximum income to get any money would be $86,000. A typical family of four could get up to $1800 which is not too bad!

When will the stimulus checks get paid out?

The original plan was to start sending out the stimulus checks in May however it was just announced that the schedule was moved up and checks will start going out on Monday, April 28. The mailing schedule is staggered and it will take about two months for all the money to be dispersed.