Hey, gang -
I'm not big on talking politics on a public forum like AR - but my frustration level is getting pretty high. Tell me I'm not crazy, or tell me if I am!
Congress and The President are tying the ribbons on a $150 Billion Economic Stimulus Package hoping to revive the economy, big time, quickly. Will it help, or has the horse already left the barn, and has the level of fear in this election year become too much to bear for these Washington politicians?
First, check out the full story in today's Wall Street Journal here.
Three of the key provisions -
1. Sizable Tax Rebate Checks, of between $300 and $1,200, depending on taxable income, marital status, and number of kids, to be sent to most taxpayers in May. (Here in Chicago, when people get money in advance of an election, some fat guys chomping cigars usually get indicted!)
2. A temporary increase in the guaranteed loan amounts Fannie Mae and Freddie Mac can purchase, ostensibly increasing the Jumbo Loan Threshold from the current $417,000 level to as high as $730,000 in the most affluent housing markets.
3. An increase in business deductions up to 50% for some capital expenditures. Small business people, like, say, us Realtors, might be able to enjoy an increased expense deduction limitation - up to as much as $250,000, from the current limit of $125,000.
Now, it's not a done deal yet. Although these measures are expected to pass the House without the usual committee wrangling, the Senate has yet to completely weigh in. Some say provisions extending unemployment benefits, increasing road repair budgets, and building public assistance programs such as Medicaid and food stamp programs will be points of debate in the Senate.
But, if passed - will all this really help - or is it just a band-aid?
Will the moderate tax rebates encourage thrift, or help all distressed consumers pay down their nearing-default home mortgages, or will it just give them a reason to buy that new 62" flat-screen HDTV, for twice the rebate amount, putting the difference on a credit card?
Will the increase in the Jumbo Loan Limit really help those who cannot afford a mortgage rate reset on that high-leverage, interest-only, adjustable rate loan, the one that, perhaps, they never should have gotten a couple of years ago?
As a small business man, I am all for increasing tax deductions on business expenses - but I get the feeling detailed rules may heavily restrict new, meaningful deductions us "little guys" will actually be able to enjoy. Further, I'm curious - what percentage of small business people actually spend $250,000 on annual expense items, and, for those that want to try - might this merely involve more credit taken on by many of us?
So, again, folks - is this all a real solution, or a booster-chair designed to help one political party or another win certain elections this November?
Really, everyone - ask anyone - I am just a nice guy from the North Side of Chicago! I'm not a crazy zealot. But - geez - I'M SO CONFUSED!
Are you?
DEAN & DEAN'S TEAM CHICAGO
