Traffic for 2008 February 8 (entry 0)

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Oh Deer >

[Comments] (4) I'm not Joe or Sumana: But I still have an opinion. (Kristen had asked what Joe &/or Sumana thinks of the stimilus bill). But I am a tax accountant. And that does qualify me to state my anger at this bill. It's NOT free money. It's an advance on your 2008 tax return. So if you normally get a refund, your refund in 2009 will be smaller. If you usually owe, expect to owe a lot more.

How is this helpful? It's a timing difference only. And my guess is that most people won't realize this, spend the money, and will find themselves in dire straights next spring. Where's the beef? they'll ask. And then, with the realization that the money they spent is no more, a real spending freeze will occur, and the potential for another recession will loom. What a fiasco.

What with busy season in full swing now, I was having fun thinking of how to spend my money. Now I'll probably just end up saving it. Bye-bye elliptical. Bye-bye new computer. Back to work.

UPDATE: Apparently I was misinformed. The tax rebate is indeed free money. It will appear as a one-time refundable tax credit on your 2008 tax return that you have already received. (two cents)But that still doesn't make it good. Anytime the government issues money and thereby increases the national deficit, we as Americans have elected to place our spending policies on the backs of our posterity. So I will probably still save my money for Maggie's/future children's college funds. I cannot in good faith spend money I've stolen from my children and grandchildren. I know it is the American way, but as for me and my house, we will not squander their inheritance. (/two cents).


Comments:

Posted by Kristen at Sat Feb 09 2008 22:04

Well, I was asking you too...Is this new news just now coming out? Or was it added recently? I didn't even know about that aspect of it and I didn't like it. $1000 plus is a lot of money and that is just for one family. Countless people would be receiving it, yet where is it coming from and who is paying for it. Now it makes sense and it sounds less appealing, but before it sounded like the government was just printing money as if it was worth something. You can't just create it like that. I am glad you are my in on moneywise stuff otherwise I would have been not happy when I found out where it was really going.

Posted by John at Sun Feb 10 2008 14:21

Yeah, the Federal Reserve knows better than to just print money for no good reason. Germany had that problem in the post-WW1 days (leading in part to WWII), and many South American countries still have that problem. All it does is drive inflation berserk.

But with the US government it is always more complicated than that. The money still does have to come from somewhere. For many of us, it comes off a future income tax tab. But for many people who will get it without paying income tax or will owe it back and can't pay it, then their "rebate" is being funded by our kids and grandkids. Anytime the government gives away free stuff, it's the kids who suffer. That's why I am anti-Social Security. I pay in while the rich baby boomers extract. But when it's my turn to get my money back, I'll be lucky to get 70% of it back, at most. That's a worse return of capital than my 401(k) is experiencing in this rough bearish stock market.

My newest dilemma is that while I am fiscally opposed to the "tax-and-spend" liberal way, I am also opposed to the Bush-McCain method of tax and splurge in Iraq while our citizens in New Orleans sit in the Superdome and die because FEMA is underfunded. What to do?

Posted by Joseph D. Walch at Tue Feb 12 2008 14:20

I haven't read blogs for a week or so, but I agree with John. Today they also announced an 'emergency' plan for people in foreclosures. I fear what our country is turning into with the irresponsible financial decisions of people buying homes they couldn't afford and then asking the government to bail them out.

I don't know how long we can head off a recession with the majority of Americans having a negative savings rate.

Posted by Kristen at Tue Feb 19 2008 13:11

Interesting update...


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