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There are things that I like about President Barack Obama’s ambitious economic stimulus package. I think that our infrastructure and energy issues need to be addressed, and that, in doing so, we will be able to provide jobs and other benefits to the economy. I also agree that something needs to be done about health care. However, I’m not sure how beneficial the proposed tax cuts would be.

Right now, the idea is to introduce a $500 tax cut. This cut would be applied on paychecks, so that you would have “more money in your pocket.” Unfortunately, if you divide up that $500 over the course of time, the more money in your pocket doesn’t amount to much. Certainly not enough to allow you to do the following, which are stated goals of policy makers:

1. Avoid foreclosure.

2. Increase consumer spending.

While direct help to homeowners in the form of loan modification is expected with the new economic stimulus, one of the selling points of this tax cut is that you could use the money to make a mortgage payment. Seriously? Most of the people in foreclosure trouble need waaaaay more than $500.

As far as consumer spending is concerned, that $500, spread out over two years, would be basically useless. An extra $21 a month is going to do a great deal in terms of kick-starting the economy through consumer spending? Riiiight.

Besides, $500 seems small potatoes next to the billions being spent on retention packages for folks at the top of the economic food chain. Trillions go to big banks, while we are stuck footing the bill. $500 of our own money back just doesn’t seem like enough. On a number of levels.

SocioFluid

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