This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stimulus Plan Needs Better Ideas

You can't spend rhetoric. Especially empty rhetoric. President Obama was eloquent trying to sell his economic stimulus program to the American public in Elkhart, Indiana, and Fort Myers, Florida, last week. And one homeless woman he met eventually did find lodging, but since that hour, hundreds more families have lost their homes.

Meanwhile, during congressional hearings last week, Treasury Secretary Timothy Geithner violated the first rule of public speaking: If you don't have anything to say, don't say anything!

And then both fell into the trap of assuming that if you throw enough money at a problem, a solution will emerge. That's the basis for creating a stimulus bill that only stimulates the spending appetite of the Friends of Democrats, who were left out in the past eight years of the Republican spending orgy.

Before the new administration took office, we were facing a $1.2 trillion deficit. Now we'll be over $2 trillion in the hole for the year, and that's not counting more bank-bailout funds.

This is your tax dollars at work -- or at play.

It's not that it's all a waste of money. The real problem is that there's no direct link to jobs, growth, incentives and multipliers in so many of the spending allocations.

  • Income tax credit: $400 for individuals, $800 for couples. The tax credit phases out for singles with income over $75,000 and couples earning over $150,000. Problem: You won't see the money until you file taxes next year, unless your employer is willing to readjust withholding schedules!
  • Car-buyer sales-tax deduction: Deduct state and local sales and excise taxes even if you don't itemize. Problem: Applies only to new cars and may not be enough to make much difference.
  • First-time home-buyer credit: Refundable tax credit of 10% of purchase price up to $8,000 for purchases in 2009. Phases out at incomes over $75,000 single, $150,000 couple. Problem: Credit maxes out at $80,000 home price, too low a limit. Must be repaid if house is sold within three years.
  • Pell grants increased by $500: Max grant is now $5,350 in 2009. Problem: Nice headline, but not enough to help the poorest students, and where's the stimulus effect?
  • Higher-ed tax credit: Spend up to $4,000 on higher education, and get a $2,500 credit. Problem: Limited to those already spending college money, and doesn't make borrowing -- or repayments -- easier.
  • COBRA health insurance help: Employer will pay 65% of costs to extend your health-care coverage after you're unemployed. Problem: Very helpful to those who lose jobs, but may still leave them with significant monthly cost. And, again, where's the stimulus?

There's nothing really wrong with these ideas. But, even lumped together, they don't make a significant dent in our economic problems. They don't deal with the thousands facing foreclosure or the threat of bankruptcy. And they don't work together to get the economy going again.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $107.72 -4.47%
FB $87.23 -2.46%
GOOG $597.79 -3.31%
TSLA $238.63 -4.19%
YHOO $31.60 -1.99%

Markets

Chart of I:DJI
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASDAQ 4,636.1050 -140.4030 -2.94%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs