This morning I read an article by CNN money about the stimulus plan and what it will do to our wallets. The article was great however, while reading, I started to get upset with the stimulus plan. I understand that our economy is a mess right now and people out there really might need some cash to survive. What I don’t understand is how this package in any way will solve any problems. To me, this package just gives people a few extra dollars to survive living the way they live a little longer. Our society drives cars they cannot afford, buy homes that they cannot only not afford, but are greater than their need. They spend too much of their income on too much of the garbage and basically just have no idea how to save. I have so many friends that drive BMW’s, have plasma TVs, live in nice places but when I ask them how much they have saved for retirement they say nothing. In my opinion unless big changes are made, these problems could spiral out of control in the future.

Below I am going to review what CNN money has reported is going to happen with the stimulus plan. I am going to suggest simple changes to what they are doing that I think in the long run could help us get back on track. Keep in mind I am not an economic expert, but our government has just recently givin money to banks that had executives making insane money (thanks to Obama for fixing that). Before I get started, let me just explain a few things about myself. I am a twenty-four year old, hard-working young adult and live a fun and happy life. I make well over 100k a year and with the stimulus plan I will be receiving money. I live in Washington, DC so 100k a year is not nearly what it sounds but I am surviving just fine. In my opinion, giving me stimulus cash is a total waste because I already have plenty of cash to do whatever I need. I think my portion of the stimulus should go to a more appropriate cause to fixing our economy.

Below is what CNN said will happen with the stimulus plan and I have short responses below as to ideas for better results-

CNN:

“Making Work Pay Credit: The bill provides a $400 credit per worker and a $800 credit per dual-earner couple. The full credit would be paid to people making $75,000 or less ($150,000 per dual-earner couple). A partial credit would be paid to those making above those amounts but no more than $100,000 ($200,000 for couples). The credit would also be refundable, which means that even very low-income families who don’t make enough to owe income tax would be able to claim it. For most working individuals, the credit will be paid over time at roughly $15 per period, assuming 26 pay periods in a year. Estimated cost: $116 billion.”

Me:

First of all, let’s understand one thing; someone who is making 70k a year in Idaho is making way more then someone making 100k a year in New York city. I think by making this credit more targeted you could get better results. Maybe they could determine the amount by an equation of income and where you live. This might sound confusing but remember this is $116 BILLION! I also think they need to exclude people who own more then one home.

CNN:

“One-time payments to those who don’t work: For retirees, disabled individuals and others who don’t work, the bill provides a one-time $250 payment. Estimated cost: $14.2 billion.”

Me:

How about rather then just giving this to anyone there should be at least a few qualifications. I would rather see a guy struggling with no legs get 1k then 4 retirees living in Florida get $250 each.

CNN:

“Break for higher income families: The bill includes a one-year provision to protect middle- and upper-middle-income families from having to pay the Alternative Minimum Tax. The AMT was intended primarily for high-income taxpayers but has in recent years threatened to engulf those lower down the income scale. Estimated cost: $470 billion.”

Me:

I understand that sometimes the upper class needs to pay more in tax. Obviously, there is something wrong with this tax if they are going to give people a one year provision. How about rather than giving people a one year provision you take the $470 BILLION and fix the tax law so that it’s effecting the right people; the people it’s suppose to.

CNN:

“Temporary deduction for car buyers: The bill would let those who buy a new car, light vehicle, recreational vehicle or motorcycle in 2009 deduct state and local sales taxes as well as any excise tax charged in the purchase. The deduction would be available to those earning less than $125,000 ($250,000 for joint filers). Estimated cost: $1.7 billion.”

Me:

Great idea guys. I understand you are trying to give an instant boost to the economy by us spending, but why not teach our citizens to do the right thing? We are in a economic crisis and you are telling people to go buy recreational vehicles?! How about you give the $1.7 BILLION dollar credit to those who are buying food for their family?! Or better yet, to those who are enrolling in money management classes! I think in the long run those spending their tax credit on a money management class would get a lot further then those riding in their recreational vehicles. Do you want a quick fix or a long term fix?

CNN:

“Temporary credit for home buyers: The bill increases the size of an existing temporary and refundable first-time home buyer credit to $8,000, up from $7,500. It also removes the requirement under current law that the credit be paid back if the buyer stays in the home for at least three years. And it would extend the credit’s expiration date to Dec. 1, 2009, from July 1. Those eligible for this credit must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009.”

Me:

I like this portion of the stimulus plan, but I still think it could use some fixing up. I think to receive the credit, you should make it mandatory that they go to a 1 day money management course. After taking the class, you would then receive the tax credit. Don’t keep giving Americans money, lets make them earn it a little bit!

CNN:

“New temporary college credit: The bill introduces the American Opportunity Tax Credit, which would be in effect for 2009 and 2010. It expands the existing Hope Scholarship tax credit and would be worth as much as $2,500 for higher education expenses, up from $1,800 currently.”

“The full credit would be available to those making less than $80,000 ($160,000 for joint filers). Those making between those amounts and $90,000 ($180,000 for joint filers) would get a partial credit. And the break would also be partially refundable, meaning lower income families with little or no tax liability could now claim some of the credit. Estimated cost: $13.9 billion.”

Me:

Our college prices are spiraling out of control. How often do you here about colleges spending millions on arenas, top of the line cafeterias, gyms and many other things that have little to do with education but more with marketing? The inflation on college prices over the last twenty years is insane! How about rather then spending the $13.9 billion on tuition help for a few, we figure out how to get these tuition costs lowered across the board.

CNN:

“Temporary expansion of child tax credit: The bill increases eligibility for the child tax credit by lowering the income threshold that must be met for the credit to be refundable. The threshold would be lowered to $3,000 for this year and next. That will allow lower income families to claim more of the credit than under current law. Estimated cost: $14.8 billion.”

Me:

I can understand this. It is becoming more expensive to raise kids. People don’t to realize that a forty hour work week typically supports one person. So if you want to raise a family, plan on working more than 40 hours a week.

CNN:

“Temporary increase in earned income tax credit: The credit will be temporarily increased to 45% from 40% of qualifying earnings for low-income families with three or more children. It also includes a marriage penalty relief provision for couples who qualify for at least a portion of the credit. Estimated cost: $4.6 billion.”

Me:

I don’t think it is ever right to tell someone how many kids they can have (China). Sometimes, it does get to a point though, is it really humane for someone who can’t support the kids they currently have to be having more? Should someone who is broke with no job really be raising a kid? Is that fair to the kids?

CNN:

“Health insurance help for the jobless: The bill includes provisions to help eligible jobless workers pay for health insurance under Cobra. Cobra coverage allows newly unemployed workers to keep health insurance provided by their former employers for a period of time.

For workers who have been laid off between Sept. 1, 2008, and Dec. 31, 2009, the government will subsidize 65% of their premiums under Cobra for up to 9 months.

Those people laid off between Sept. 1, 2008, and the day the stimulus law goes into effect, and who did not sign up for Cobra, will get an additional 60 days to do so and receive the subsidy.

The subsidy will be limited to those whose income for the year is $125,000 or less ($250,000 for couples filing jointly). Estimated cost: $24.7 billion.

Another provision provides states funding to help pay for expanded Medicaid rolls for workers who’ve lost their jobs and can’t afford health care on their own or can’t get Cobra coverage because their former employer doesn’t offer a health care plan. Estimated cost: $87 billion.”

Me:

The thing is, our heath care system is a nightmare and will contiunue to spiral out of control. That’s great the government offers to pay 65% of the premium but I bet whatever medical procedure you are getting is so expensive that at the end of the day, you’ll still wind up in massive debt. Let’s take the $87 Billion and try to fix our heath care system. Why are over the counter drugs in Mexico cheaper than prescription drugs here? Lets cap medicine prices and fix this heath care crisis.

CNN:

“Unemployment benefits: The bill provides jobless workers with an additional 20 weeks in unemployment benefits, and 13 weeks on top of that if they live in what’s deemed a high unemployment state, of which there are now about 30. Estimated cost: $27 billion.”

Me:

I ran into a guy today who is collecting unemployment. He was on his way to go skiing up North. I am sure he is looking for a job but does he really need to be going on vacation? If he can afford a vacation should he be receiving unemployment? Just for the record, the guy is not wealthy at all. Maybe they should treat this like probation. The only people who get the credit are those that meet with a job counselor. I bet so few people would meet with the counselor that the government would spend less than the $27 billion on the credit/consoler fees together.

CNN:

“Food stamp payments: The bill includes a provision would increase food stamp payments by 13.6%, so a family of four would see an additional $80 on top of the $588 per month they receive currently. Estimated cost: $19.9 billion.”

Me:

I once saw Old Dirty Bastard (rich and famous rapper from Wu-Tang Clan) using food stamps on his MTV show. The guy definitely did not need food stamps, but for whatever reason, he had them. How about you take the extra $80 a month and give them a counselor that can help create a plan for them to get out of debt? We are continuing the problem with food stamps and not working in any direction to fix it.

Final Thoughts-

At the end of the day, I am not an expert on the economy. I personally feel that these solutions are only a temporary fix to our growing problems. How many people out there like my self would the government be wasting this stimulus money on? Trust me I will take the money and spend it but why cant it be going to a better cause to fixing our economic crisis?

Portions of this article came from CNN Money. Click here to go to their well written article about the stimulus.