150 Billion Dollars is to be pumped into the ailing US Economy in a bid to prevent a recession. House Leaders and the White House reached a deal, where the White House gave ground on giving those who earn under $3000 a rebate of $300. Others will get about $600, and will be reduced as they get closer to having an income of $75,000.  Business is getting $50 Billion to invest in plants and equipment.

Individual taxpayers would get up to $600 in rebates, working couples $1,200 and those with children an additional $300 per child under the agreement. In a key concession to Democrats, 35 million families who make at least $3,000 but don’t pay taxes would get $300 rebates. (source)

I am no economist, but I don’t know, if you owe a ton of money, does borrowing more money make sense? I mean the Deficit is expected to top $250 Billion, then there is the Trade Deficit and let’s not forget the repayment on the National Debt either. Okay, I understand that people need help, but the financial markets? Just seems to me that this ‘trickle down theory‘ that has been in existence for eons, hasn’t worked very well so far, so why is it still the focus of economics?

There appears to be two big issues here.

1. The Financial Institutes are in trouble, mainly because of their shady business ethics when it comes to lending money and to mortgages. Big Corporations are hurting a little, because well people aren’t rushing out to buy their FOREIGN MADE GOODS, which frankly are dangerous to one’s health.

2. People are finding it harder to survive because the cost of living is rising while their income isn’t. Add into that mix that they have been blindsided by the Mortgage Industry and are now seeing their property values drop like a brick.

So the Democrats & Republicans have decided that in order to turn the economy around, to stop it from sliding into a recession, they need to dole out some cash to people, hoping they will then rush out and do some shopping. At the same time they are hoping to give the same businesses who have outsourced everything, some incentives to improve their plants and equipment.

Business Incentives:

I don’t know, but if most manufacturing is done overseas, if most technology is overseas, and only the corporate shell exists in the United States, uh just which plants are going to be upgraded? Then too, if the equipment that needs upgrading isn’t made in the USA, just which country is going to benefit from the purchase of new equipment? The USA or the Country who SELLS THE EQUIPMENT?

By the way, just how much money in salary and bonuses did the CEO of Exxon get last year? How about the Fanny Maye Mortgage CEO? Or Mattel’s CEO? If these companies need some incentives, how about if the cash paid to the CEO’s and other BOARD HOGS was reduced by half? Let them use those MILLIONS to buy new equipment, instead of Taxpayer Cash.

And let us be honest here. While the businesses that need the money, the small Mom & Pop operations, how much do you want to bet that they don’t see a dime of the FIFTY BILLION?

Rebates:

So the Democrats won a concession from Bush, those who earn very little and pay no taxes, will get $300. Isn’t that generous of them, after all let’s be honest, it isn’t like they need the money, there are food stamps, welfare, and hey it is rather dry under that bridge that might collapse any day. So why would they need any of the Rebate Money?

I love the bit about where investments into retirement plans like 401K’s won’t count towards the income level, so that those earning decent incomes will still get a rebate cheque. I mean isn’t that sweet, after all not like they are searching for a dry place to sleep tonight or tomorrow night.

The rebates would phase out gradually for individuals whose adjusted gross income exceeds $75,000 and for couples with incomes above $150,000. Contributions to IRA and 401(k) retirement accounts and health savings accounts would not count toward the income limit. (source)

Don’t get me wrong, the Middle Class is in trouble, but if you can’t make ends meet on $75K income, then there is a lot more wrong with the economy than just the greed of Big Business & Unions.

So will rebates of under a $1000 make you go buy a new sofa? Maybe you’ll get that new plasma television you wanted for the recreational room, or maybe a new dishwasher? Somehow, I think that if people are over their heads in credit card debt, if they are facing the risk of losing their home, they aren’t about to go out shopping. Specially if they have children, because College is rearing its head too. And that ain’t cheap today, never mind what it will be in 10 years time from now.

Simply put, rebates are a bone thrown to a starving dog. At the very best, it might hold off the recession for a month or two, but the problems that have created this crisis aren’t going to go away because the Idiots in Washington threw it a bone. Foreclosures will continue to rise, and property values will continue to plummet. Jobs aren’t being stopped from being outsourced, and IMPORTS CONTINUE TO RISE, while the cost of living continues to RISE.

Jobs that pay decent income are going abroad. Prices for food, for goods, aren’t going down, and yet Corporate Profits continue to rise.

If you really want to stop people from worrying, give them real solutions to look at. STOP THE BLEEDING IN THE HOUSING MARKET. Put the financial markets on notice, that they created the mess, now they HAVE TO CLEAN IT UP, and that doesn’t mean giving their Executives Pay Hikes. Course, isn’t that what Congress just did? Gave itself a pay raise for doing nothing?