By DEB RIECHMANN, Associated Press Saturday, January 19, 2008
WASHINGTON -- With recession fears rising and the stock market tumbling, President Bush on Friday called for up to $150 billion in tax relief for consumers and business -- and said there was no time to waste.
Bush's urgent remarks gave fresh impetus to congressional leaders already hard at work on an economic rescue package that would include extra money for food stamps and jobless benefits in addition to tax rebates of hundreds of dollars each for millions of Americans. The hope is that people would immediately spend those rebates and give the economy a badly needed boost. "I believe we can come together on a growth package very quickly, and we're going to need to," Bush said. Wall Street remained skeptical. The Dow Jones industrial average dropped 59.91 points after plummeting 306 points a day earlier. Bush said the rescue effort should be both quick and temporary, a one-time boost for a national economy that is in danger of sliding into the first recession since 2001 if it hasn't already edged across that line. The president's tone was somber in his remarks at the White House, but his mood was upbeat later in the day when he visited a factory to underscore his focus on the economy. "Crank this sucker up," he exclaimed, an exhortation that could fit his hopes for economic revival, though he was referring specifically to a huge riding mower at Wright Manufacturing. Once the engine was roaring, Bush jumped on and steered the mower playfully. Despite darkening economic reports, he said that if Congress passes a quick federal relief package, "We're gonna be just fine." At the White House earlier, Bush avoided the word "recession" but acknowledged the economy was severely strained by the long housing slump and high oil prices. "There is a risk of a downturn," Bush said. For a stimulus package to have much impact, he said it would need to represent roughly 1 percent of the gross domestic product, or about $140 billion to $150 billion. On Capitol Hill, Democratic leaders pledged to cooperate with Bush and congressional Republicans. Senate Majority Leader Harry Reid, D-Nev., had criticized Bush on Thursday for deciding to speak publicly on the package before a deal had been struck, but Reid said Friday he was encouraged by the president's remarks. Some Democrats, though, said they were disappointed that Bush had focused only on taxes. "We want a balanced package of tax rebates for the middle class and spending stimuli that jump-start the economy quickly. The president has included one; he also needs the other to quickly improve our economy," said Charles Schumer, D-N.Y. Sen. Edward M. Kennedy, D-Mass., said that "we cannot forget that any effective stimulus plan must start and end with America's working families. The people who are struggling every day to pay their bills, heat their homes, and pay their mortgages need our help now, and helping them is the best way to be certain that any stimulus goes directly into the economy."ignaling a willingness to cooperate, Rep. Barney Frank, D-Mass., was to say in the Democrats' Saturday radio address: "Democrats stand ready to work with the president and congressional Republicans to put together a bipartisan package including tax rebates for most Americans,and one-time increases in programs directed at those who are bearing the heaviest burdens in this economy." Treasury Secretary Henry Paulson said the administration was being intentionally vague so as not to taint negotiations with lawmakers, but he spoke with vigor about fast action. "When we get the legislation, we're going to run like a bunny here to get the relief out," he said. Paulson said business incentives the administration envisions would help companies invest, expand and hire more workers. The White House estimates that a stimulus in the range of what Bush wants could create 500,000 additional jobs this year. "We need to get this deal done and get it out and get money in the hands of our consumers and small business owners." Democratic congressional leaders agree that tax relief should be in the package. Lawmakers are considering tax breaks for businesses investing in new equipment and a $500 rebate for individuals, said congressional aides involved in the talks. Details for couples and people with children are still being negotiated. Senior aides to House Democrats and Republicans, however, said the measure also could contain increases for food stamps, and higher unemployment benefits. "Democrats welcome President Bush's willingness to work together with Congress to provide urgent relief to the millions of Americans facing economic hardships," House Speaker Nancy Pelosi, D-Calif., said, adding that the two parties would "work together on the details of a stimulus package." Bush has gone down the tax rebate road before. Back in 2001, he added refunds of up to $300 per individual and $600 per household as a recession-fighting element of the tax cut plan that had been the centerpiece of his 2000 campaign.
Okay, so they will be 'rebating' us back our taxed dollar ONLY to have to claim it on our income tax and pay tax on it AGAIN!!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Some say federal rebate should be saved, not spent BY EILEEN AMBROSE The Baltimore Sun
Consumers for years have done more than their share of propping up the economy. And what do we have to show for it? Steep credit card debt. Little or no savings for retirement or college. Rising bankruptcies. More late payments on car and homeequity loans. Yet now, with the economy in danger, politicians are calling on consumers to spend even more. They’re even giving us the cash to do it. Instead of spending the $300-to-$1,200 tax rebates we’ll be getting, use them to improve your finances. Pay off high-rate credit card debt. Invest in a 529 college savings plan. Start an emergency fund. Salt money away for retirement. Do something that will leave you in better financial shape — not just for a week or month, but longer term. “You listen to some people and it’s almost unpatriotic if you don’t take the money out and spend it right away,” says Tom Ochsenschlager, vice president of taxation for the American Institute of Certifi ed Public Accountants. His group co-sponsors a savings campaign called “Feed the Pig” — as in piggybank. “You can be patriotic and save the money,” he says. That’s not what economists want to hear, of course. The tax rebate is supposed to jump-start the economy. It’s worked in the past, some economists say. The current rebate is modeled after the one in late summer 2001, when about two-thirds of households received rebates of up to $600. A National Bureau of Economic Research study found that about two-thirds of those rebates were spent within six months. The recession ended in November 2001. Economists say saving or investing the rebate helps the economy in the long run, but what’s needed now is a short-term fi x. They want consumers to spend. And, if they had their way, you would buy American-made products and services so you create jobs here, not in China. Without a boost in short-term spending, the economy could topple into a recession and workers could lose their jobs, says Diane Swonk, chief economist with Mesirow Financial. Those living paycheck-to-paycheck are more likely to spend the money, Swonk says, which is why she favors rebates for lower-income households. Under the proposal agreed to in Congress, a worker earning at least $3,000 but not enough to pay income taxes will receive a $300 rebate. The maximum rebate will be $600 for single taxpayers with income up to $75,000 and $1,200 for couples with income up to $150,000. Those with children get an extra $300 per child. Rebates gradually phase out for higher earners. David Wyss, chief economist for Standard & Poor’s, favors rebates. But he admits if he were advising an individual, he would suggest using the money to pay off credit cards. “If I’m giving advice to the country, you need someone to go out and spend money, and eat more meals out and stop cooking yourself,” he says. Wyss is not afraid that advice to save or invest the rebate will derail the economy. “I’m not concerned about people listening to rational advice and not spending,” he says. “For most people, if a check shows up in their mailbox, it gets spent really quickly.” Not every economist is a fan of the rebate. “It’s a bad idea,” says David Resler, chief economist with Nomura Securities. Resler says the effect of the 2001 rebates on the economy are exaggerated. This stimulus package, which includes the rebates, will add about $150 billion to the country’s debt. “Which means now or later, interest rates will be higher than they would have otherwise been,’” he says. Economists, of course, are looking at the big picture. But for financial advisers dealing with clients financially struggling, it’s hard to support a spending spree. “What drives me most mad about this tax rebate is that it’s all about more consumerism,” says Joanna Smith-Ramani, director of the Baltimore CASH Campaign. “They are saying, ‘Buy, buy, buy.’” The CASH Campaign provides tax preparation and financial counseling for workers being targeted with rebates. The group encourages clients to use tax refunds to catch up on bills and salt away what’s left in a savings bond, savings account or certificate of deposit. Just the opposite of what the government is encouraging now.
Stupid idea....it amounts to about 2weeks pay---big freakin' deal---save the energy time and money and resources it takes to send them out.....most of us will be sending it back next year......please stop buying the votes....
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
Don’t buy a vacation or more ‘things’; donate rebate check to charity
The 2008 Tax Refund Incentive is being promoted as an “economic stimulus incentive,” intended to jump-start the slowing national economy. The plan is that if the federal government gives everyone $600 ($1,200 to couples), the recipients will then spend the money on some tangible product. Suggested possibilities are a new front-loading washing machine, flat-screen TV or some other “thing” that will thereby stimulate production and keep people employed. An AP article by Megan K. Scott, “Use your tax rebate to fund memorable family getaways” [April 13 Gazette], suggests that a trip to the Caribbean or to Mexico would be a suitable use of the refund. This article raises the question: Just how does a trip to Mexico stimulate production in the United States? The reality is this: A few folks may make such a purchase, even ignoring the fact that the product may well have been imported, which would defeat the purpose of the legislation. However, for some people, the $600 is “found money.” Some will use it to pay a long overdue debt, such as rent or a mortgage payment, a doctor’s bill or a grocery bill. Some will simply add it to their investment portfolio, with the thought that although in the “big picture” it’s not a large amount, the drive to “make money” will justify adding to that pool to generate more interest or dividend income. The thought occurs, since it’s “found money,” one way to fulfill the objective of the legislation is to donate the money to an organization such as Schenectady Inner City Ministries (SICM), City Mission or another community service organization in your community with a proven track record of using money on tangible products to help those in need. If donated in this way, there may be the following results: The money will immediately find its way into the economy by purchasing food, clothing or other much-needed things, thereby, fulfilling the intent or the legislation. There is relatively little impact on the lifestyle of the original recipient of the $600 check. The recipient is simply a “pass-through,” sending the federal check to an agency to help people who have many needs. The money will be used quickly and therefore would stimulate the economy as intended. The donation might be taken as a tax deduction. (This point should be checked with your tax adviser.) The impact may be doubled (or even more!) if the donation is eligible for matching funds from GE or other employers or former employers, if retired. We encourage you to consider this alternative when you receive your $600 check. WILLIAM AND SHIRLEY MCCLARY Burnt Hills
Ok, I'll tell National Grid, Price Chopper and the gas station that they need to wait for payment while I use the product anyway, donations come first.
Are they serious? I understand "tithing" and donations (which are usually tax deductible) - but we're going through some seriously lean times (all of us) - they want us to give away the $?
we cant give it away...it's at the end of hook and line that the government is getting ready to reel in......it would be like a big mouth bass on a hook trying to pass it on to his neighbor.........
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
Most of the people who receive this check (middle class) will either put it into savings or pay down debt (I'll be doing one or both with it). This check isn't going to stimulate anything.
Stimulus checks boost retail sales The Associated Press
WASHINGTON — The stimulus checks are working. A big increase in retail sales signaled that people are spending their rebate payments, helping to ward off a serious economic slump, at least for now. The Commerce Department reported Thursday that retail sales soared 1 percent last month, double what had been expected. It was the largest increase since November and represented strong sales at a variety of retailers including the biggest increase at department stores and other general merchandise stores in a year. The May increase, double what economists had been expecting, provided the strongest evidence yet that the economy is getting a major boost from the $50 billion in economic stimulus payments the government sent out by the end of May, slightly less than half of the $106.7 billion scheduled to be sent out this year. The Bush administration is hoping the stimulus payments will offset the gloom from a prolonged slump in housing, a severe credit crisis, soaring energy bills and rising layoff notices and keep the country out of a deep recession. Highlighting the pressures on the job market, the Labor Department reported Thursday that new applications for jobless benefi ts rose by 25,000 last week to 384,000, the highest level since late March. It was a much bigger increase than expected and came after news last week that the unemployment rate in May jumped by the largest amount in 22 years, up to 5.5 percent from 5 percent in April. Stocks finished higher on Thursday but well off their highs for the session after a resurgence in oil prices cut into Wall Street’s enthusiasm for the bigger-than-expected jump in retail sales. The Dow Jones industrial average rose 57.81 points to close at 12,141.58. The big rise in May retail sales and upward revisions showing stronger sales than previously reported in March and April left economists feeling more secure that the economy is still skirting by the current slowdown without a full-blown recession. “For now at least, the tax rebates are trumping the higher energy and food costs and the other problems consumers are facing,” said Mark Zandi, chief economist at Moody’s Economy.com. “People are spending the money and not saving it or paying down debt.” Nigel Gault, an economist at Global Insight, had been expecting the overall economy, as measured by the gross domestic product, to be just barely positive in the current April-June quarter, with GDP growth of 0.2 percent. But after the retail sales report and the upward revisions to previous months, he said GDP growth could come in around 1 percent. “The landscape has completely changed with the report on retail sales,” he said. “This just changes the whole picture.” But Gault cautioned that there could be a payback down the road once the boost from the rebate checks begins to wear off later this year. However, other economists said the good boost to sales so far held out hope that consumer spending will remain strong through the summer. “Recession? What recession,” asked Joel Naroff, chief economist at Naroff Economic Advisers. “Households may be complaining about the cost of living, but they are still buying an awful lot of things.” The retail sales report showed that general merchandise stores, which include department stores and discount stores such as Wal-Mart, saw sales rise by 1.2 percent, the best showing since a 2.1 percent rise in March 2007. Sales were also strong at stores selling appliances and electronics, building materials, sporting goods and health care products. Sales at gasoline stations surged by 2.6 percent, an increase that reflected soaring pump prices. But even excluding that big gain, retail sales would have risen by a solid 0.8 percent. Auto sales rose a modest 0.3 percent, only a tiny rebound after a huge 2.1 percent plunge in April as demand is being battered by soaring energy prices that has cut into sales of pickup trucks and sport utility vehicles.
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