Yesterday, the Senate passed an $838 Billion “stimulus bill,” of which a reported 42% percent of its $838 billion in debt-financed costs is tax cuts, including Obama’s signature $500 tax credit for 95 percent of workers, with $1,000 going to couples. In contrast, the House version is about one-third tax cuts. At the time of this post, it sounds like that an $800 Billion compromise version of this monstrosity is almost ready for voting by Congress.
So where is the rest of the money going? In case you have forgotten, read the previous post – it’s all going to increase the size of the Federal Government and what I would term “special interests.” But what about the hardworking person that is fighting to keep a roof over their head? From MSNBC.com:
Obama’s “Making Work Pay” tax credit would be reduced from $500 per worker to $400, with couples eligible for an $800 credit, instead of $1,000, said a Democratic aide close to the talks.
[Senate Finance Committee Chairman Sen. Max] Baucus had said earlier that $35.5 billion to provide a $15,000 homebuyer tax credit, approved in the Senate last week, would be cut back. There was also pressure to reduce a Senate-passed tax break for new car buyers, according to Democratic officials.
From another MSNBC.com article:
A provision limiting compensation for top executives of companies receiving federal bailout assistance appeared likely to be dropped altogether because of an unanticipated $11 billion budget cost.
So it should be obvious to even the most rabid political party supporter that our elected politicians do not have the best interests of the general populous in the forefront of their concern. Instead, their aim is to grow the government and take care of their supporters on the backs of the taxpayers. And they are going to do it with debt-financing, which is one of the reasons we are in this mess to begin with.
Now before I go further, let’s stop and think about the following points:
The bailout of the bankers cost the taxpayers $700 Billion, and the expected final tally for the Obama stimulus package is around $800 Billion. That’s $1.5 Trillion. To put it in perspective, that’s $1,500,000,000,000.00 that the Federal government does not have, and they are adding that to the current national debt ($10.7 Trillion). Additionally, I have heard rumblings that since the first $700 Billion to the banks didn’t work, more money may be requested.
Among the reasons for the continuing slow economic recovery (which some have termed a recession) is the lack of credit lending by the banks and other fiduciary companies due to the large number of bad loans. Even though these institutions have received Federal loans, they are not lending money to the public or businesses because of the downturn in the economy. To exacerbate the problem, jobs are being cut by the various businesses because of the lack of funding to the public for purchasing goods & services. This now becomes a vicious cycle.
But doesn’t it seem ironic that in order to stimulate the economy that was ruined by too much credit, we must now borrow money, i.e., more credit, to put back into the economy? Does anyone else out there think that this is insane, and only delays a total meltdown?
So here is my counter-proposal to the Obama Stimulus Plan – Tom’s Taxpayer Economic Relief Boost (TTERB). TTERB would work in the following manner:
- Each taxpayer would receive, without paying additional taxes of any nature, an amount from the Federal Government equaling the total of Federal Withholding Tax (Federal Income Tax) for the past five years. Those who have not paid any tax are not eligible for this refund.
- Each homeowner shall be able to deduct the entire amount of interest paid on home mortgages. For those with multiple homes, only the lowest amount of interest paid on an individual mortgage shall apply. For those who live in apartments, 20% of the rent paid during the year shall be eligible for deduction. This deduction will only be available for three years.
- The refunds and deductions as outlined in the above points shall first be applied to outstanding debt such as credit cards, past due bills, personal loans, back taxes & penalties, and the like before any other expenditures are to take place. Mortgages and car loans shall be exempt from this provision unless the taxpayer is behind in payments or is in danger of foreclosure.
- The refunds and deductions as outlined in the above points shall not be used to fund or otherwise apply for new debt or credit lines.
What this proposal will do is put money back into the hands of the responsible, tax-paying people that the Obama Stimulus Plan proposes, only without the government handouts and pork. The consumer is now able to not only pay off debt that may have been incurred, but should the person have lost their job, be able to pay his bills until the economy, spurred on by increased consumer spending, rebounds and is able to become employed again.
The entire idea is to put money back into the hands of responsible, hard-working tax-paying Americans who have put money into the system. It’s time to give these people a break. Of course, this proposal is discriminatory – deadbeats and tax-cheats will not benefit.
Yes, I know this is simple, probably too simple, for the great minds that we have in Washington to understand. But I’m a simple person, and keeping it simple works for me.