Stimulus Plan Good for Economy?

Bush's proposed stimulus plan, intended to boast the economy by putting 150 billion dollars back into taxpayers pockets in the hope that they will rush out and spend it will have far reaching tentacles and affect approximately 117 million families across the country. Will it help stave off a recession? The debate is ongoing as to the good it will do the economy with many saying that it is too little to late.

The plan would target those that had income of between $3,000 and $75,000 (for individuals) or $150,000 (for couples) in 2007. Phase out begins at these income limits and reduces the rebate by 5% for every $1000 until the phase out cap is reached, $87,000 for individuals and $174,000 for couples. Contributions to 401K retirement plans, IRA's and health savings accounts will not be counted as income for the purposes of the rebate.

As a concession to democrats, families who earn at least $3000 in income but pay no taxes will qualify for a partial rebate of $300.00. Individuals would receive a rebate of up to $600.00 and couples up to $1200.00, those with children will receive an additional $300.00 PER child.

The stimulus program as its proposed right now will put a check in the hands of some 48 million families that missed out on the rebate checks in 2001.

Not everyone is happy with the package that has been hammered out. Many Democrats feel that too much was given up, they had hoped to include higher food stamp benefits as well longer unemployment benefits. As the bill moves to the senate floor next week some are still hoping to add these elements.

Speaking for my own family and falling somewhere in the middle of the income bracket for an individual with four children, I'll be taking my rebate of $1800.00 and stashing it for a rainy day. Living cost have risen in recent years and as they've gone up it seems that my savings have gone down, fuel prices are also taking a big bit out or my budget. This rebate will not provide a long term fix for my family as far as cost versus income but it will provide an additional cushion.

Bush would like to see the money pumped right back out into the economy but I like others do not plan to hit the malls and shop til I drop. In a credit driven world it's all to easy to become trapped by debt and many who find themselves in that situation have said that they will us the rebate towards lowering their credit card debt.

"This package will lead to higher consumer spending and increased business investment," Bush says.

But in lurking my way through chat boards I came across many people who say that they plan to bank their rebate or drop it into their retirement fund rather than shop. The rebate intended to provide a much needed plug for our bleeding economy may not have the intended affect if more people than not do indeed pay bills rather than hitting the mall.