February 15, 2009

Ridiculously Happy

I have a million things to do, and not enough time to do everything, yet I'm in a fabulous mood. It seems like everything is starting to fall into place and I am pretty optimistic about my future. And a great haircut helps too.

On to other topics...
The bailout is a hot issue these days. I have read several articles on the bailout stimulus, but few really explain how it affects us people. I'm sure most of you have heard about the "rebate." Most people will get roughly $300-400 - in form of a tax break. It will come in each paycheck that you get; most people will see about $25-$33 less in your taxes per month. Doesn't sound like much, does it?

Most of the money is going to states in order to create jobs. It'll allow states to pour money in fixing roads, bridges, improving various public aspects of the state as well as retaining or adding jobs in the government. The money, hopefully, will also be used to help small businesses stay open and hire people. Small biz, after all, account for about 90% of U.S.' jobs.

One thing I was happy about in this stimulus is a retroactive provision that banks who took the first bailout money are required to meet the new regulations that are being imposed on any new bailout bank loans. In other words, they are being made accountable for how they used the money. Of course, there are loopholes that banks will try exploit, but hopefully they'll step up the plate, do the right thing and fix their mistakes.

Will they? That remains to be seen. Another good piece of news for homebuyers this and next year. If you buy in '09 or '10, you will get a "loan" of $7,500 - this was formerly available only to first time home buyers. Also, if you stay in this new residence for three years, you won't have to pay this loan back. If I weren't planning to globe-hop for the next few years, I'd be pretty tempted by this deal.

Anyway, back to the topic at hand. I have heard many people in D.C. complaining about this "rebate." It's not a big chunk of change for people in my demographic, and $25 a month seems like a pittance. But when you consider that they'll allow many many low-income families to stretch their money just a tiny bit further and buy things they couldn't before. Like more food, another tank of gas...New sneakers for the kids. Schoolbooks. Presents for birthdays.

That meager extra $25 will go far for families whose income are under the national household income median of $50,000. Roughly 37% of Americans families, with both parents working, make under $30,000 a year. That's a pretty big chunk of demographic. (Source: U.S. Census Bureau; I say roughly because they haven't made 2008 numbers available yet, so I bumped up the 2007 35% a little.)

Hope this helps put things in perspective a bit.

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