Second Stimulus Check? Another One Might be on the Way
Tip It!It seems that economic stimulus checks are once again a hot topic… Back in June, I wrote about Barack Obama’s economic plan and the fact that he was floating the idea of a second round of economic stimulus checks. While talk of another stimulus package cooled for awhile, it’s heating back up…
Apparently Deomcratic lawmakers are now considering another stimulus package, which some economists are saying should total as much as $300B, and happen as soon as November. Fed Chairman Ben Bernanke recently weighed in, saying that a fiscal stimulus package “seems appropriate.”
Bernanke went on to argue that an “ideal package” would not only boost spending, but would also include measures to combat the tight credit situation. Among the measures that have been batted around are an extension of unemployment benefits, loan guarantees, additional support for Fannie Mae and Freddie Mac, tax credits, and another round of stimulus (i.e., tax rebate) checks.
I recognize that this might not be a popular opinion, but I’m not a big fan another round of stimulus checks. In fact, I didn’t really like the first ones. The main reason for this is that the government doesn’t actually have the money to give away. Borrowing from the future to prop up the economy in the short term just doesn’t seem like a sound long-term economic policy.
Note: Details of the economic stimulus package have been circulating, and there’s no mention of a second stimulus check.
Published on October 22nd, 2008 - 92 Comments
Filed under: Economy
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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92 Responses to “Second Stimulus Check? Another One Might be on the Way”
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October 22nd, 2008 at 8:31 am
Sound economic policy would be an actual reduction in income tax rates, not these Robin Hood-like Karl-Marx-would-be-proud income transfers.
October 22nd, 2008 at 9:02 am
If they are going to go ahead with any sort of stimulus, I hope it would only be focused on speeding/loosen the flow of lending, and be focused on infrastructure improvements (roads, bridges, dams, etc). I think another round of checks to individuals is the opposite of what we need (if anything beyond time).
October 22nd, 2008 at 9:40 am
Honestly, I don’t see how anyone could boast about a tax rate cut – given our national deficit, we all have a duty to pay in to the system, no matter our income.
That said, I’m in agreement with you about a second round of stimulus checks. However, if we receive one, I figure I put it in savings for my kids’ future, if nothing else.
October 22nd, 2008 at 10:51 am
If any stimulus is needed, it should be in the form of government spending on alternative energy R&D and related infrastructure. Giving more money to consumers to spend is like giving a drink to a drunk. Tax cuts would be bad fiscal policy right now, as much as I hate to admit it.
October 22nd, 2008 at 11:39 am
I don’t think a second stimulus check will help out the economy, due to the fact that people don’t spend their money on the right things. Instead of investing their money back into the market with the checks, they spend this money on stuff that they want instead of stuff that they need.
October 22nd, 2008 at 12:00 pm
I agree with Tough Money and his quote:
“Giving more money to consumers to spend is like giving a drink to a drunk.”
A great analogy.
October 22nd, 2008 at 12:58 pm
I much preferred the second stimulus package the Dems proposed immediately after the first: funding for infrastructure improvements. That solves two problems: job creation (thereby increasing the income tax base), and fixing all those roads and bridges that we’re going to have to fix eventually anyway (thereby saving money that would be spent doing expensive emergency repair when, say, a bridge in Minneapolis collapses.)
October 22nd, 2008 at 1:10 pm
I don’t think the new stimulus plan will be in the form of checks, will it? I thought it would be more in the idea of “The Great Society” where the government invests in areas that will create jobs. I hope that is still where they are.
October 22nd, 2008 at 1:11 pm
All you people that are whining about giving away stimulus checks are just whining because you make so much money that you won’t be getting a check. I know $1800 to you is only a weeks pay takehome, but for a family of four making $60,000 thats a house payment and a months worth of groceries. So it actually takes the debt chokehold off of you for a few weeks.
October 22nd, 2008 at 1:52 pm
Screw a stimulus check. It’s not going to help out at all. My parents took their stimulus check and paid their bills with it. What the government need to consider is clearing out everyone’s debt, and then send out another stimulus check. That would for sure fix this fucked up economy.
October 22nd, 2008 at 2:13 pm
Stimulus check is no different than taking a cash advance on a credit card and not paying off the balance. A Horrible idea.
October 22nd, 2008 at 2:30 pm
The best stimulus we could have is a constitutional balanced-budget amendment. Baby Boomers need to quit stealing from their children and grandchildren for their spendthrift ways.
October 22nd, 2008 at 2:32 pm
Hi need that Damm second stimalis check,I have a handicap son that is 21 years old that im taking care of. My husband only works part time hours. So therefore im taking care of most of our housewhole needs.I will do alot with that money….
October 22nd, 2008 at 4:10 pm
What about those people out there who are good people who have been laid off of work because of this big world crisis, my husband and I have three kids, and just last week were laid off from our jobs, our employeer told us that if we filed for unemployment we wouldnt get it, the second round of checks would really help us right now.
[A lengthy treatise on the 'We Deserve It' dividend has been redacted because it's based on flawed math. $85B split 200M ways works out to $425, not $425,000. Sorry.]
October 22nd, 2008 at 4:21 pm
I agree. A second stimulus package will do as much as the first one – Nada. Besides, our dollar can’t continue to take more debt on top of more debt. These bailouts threaten our strength as a nation, and in turn our economy. Maybe the next stimulus checks should come printed on foreign currency.
October 22nd, 2008 at 4:28 pm
Kristin, don’t believe an employer that just laid you off. Contact the local unemployment office and ask them if you qualify.
October 22nd, 2008 at 5:08 pm
My disquiet is similar to Nickel’s. Are we just going to have to borrow more for this stimulus package?
October 22nd, 2008 at 10:07 pm
A stimulus of any kind should meet three important criteria:
1. It should actually stimulate the economy.
2. It should be short term and temporary.
3. There should be a long term component to make sure that whatever mistakes put us where we are cannot do so again.
I’m not an economist and don’t know how to achieve those three objectives, but I strongly disagree with Nickel’s general assertion that, “Borrowing from the future to prop up the economy in the short term just doesn’t seem like a sound long-term economic policy.”
It makes perfect sense to do this IF the three criteria above are met, since the ultimate effect will pay for the initial stimulus. However, I would agree that if these criteria cannot be met, then we should forgo a stimulus.
October 22nd, 2008 at 10:24 pm
MITBeta: Point taken. However… Are those $600 checks that went out earlier this year paying for themselves?
October 23rd, 2008 at 12:33 am
Stimulus packages like this do not work. I also fall into the family of 4 with (almost) a $60k income category and I would welcome an $1800 check, but I honestly don’t think it will get the economy going – at least not for very long. You MAY have an increase in spending by some while others (dare I say the smart ones) will save it or pay off debt, so the impact would be pretty small. No new jobs would be created, and that is what people like Kristin and her husband need. A stimulus check would help them out for a month, but a job would help them out long term (kind of like the old saying about a man and a fish).
Past experiences show that tax cuts and infrastructure spending by the government would do much more to grow the economy and create new jobs than any stimulus package ever would (obviously the last one didn’t work so well). Trickle down economics does work. Unfortunately most politicians in Washington are more concerned with short term band-aids to help them get elected than real solutions to build a stronger future.
October 23rd, 2008 at 9:31 am
Maybe the fed can just send me 10,000 shares of the next bank they buy into. I’d take that over a stimulus check! Seriously, though, how many people out there complaining about the stimulus checks are ones who didn’t get them in the first place (making $160k-plus or whatever)?
As someone under 30 in a family which makes somehwere between $75k and $90k, depending upon business income, I’d welcome the check! I’m ALWAYS willing to borrow from the future to avoid financial meltdown NOW. To be fair, I’d likely invest the actual stimulus in Roth IRAs and 529s, but doesn’t buying shares of stock also help the economy?
I think this is a time when shocks to the system need to be used. Even Ben Stein agrees that government action is prudent, though I don’t know his thoughts on the stimulus.
October 23rd, 2008 at 9:51 am
Don’t get me wrong. I’m not necessarily advocating the issuing of checks to all working families… I’ll agree with Nickel that I don’t think that the stimulus from earlier this year is having its intended outcome.
But, there are a lot of ways to incentivize the economy, so don’t rule out ANY stimulus based on thinking that we’re just going to get another round of checks.
October 23rd, 2008 at 10:35 am
quite frankly, it must be nice to be able to ’save’ at all, let alone a stimulus check. as a single mother who earns a decent income and is frugal with money and STILL can’t put food on the table and see’s the holiday’s a blink away…yes, a stimulus check is desireable, but more than that…beyond necessary.
just because some are able to save this kind of ‘bonus’ or pay off debt (which i have none of) does not mean all are in the same boat. realize that there are those living in poverty while working hard and doing all the right things. we may be the minority, but we are out there and it is insulting to hear people complain about there being another and oh well, i think i’ll just ’save’ mine.
….really must be nice.
October 24th, 2008 at 2:28 pm
Donny Gamble:
The Fed is complaining that Americans spent the first simulas check paying down debt, rather then going out and buying a $600 purse or TV.
They are now trying to figure out how to make the money go on buying stuff rather then getting us out of debt.
They were at least smart enough to not suggest sending the money out as “Wal-mart gift cards”, becuase even they could see that I’d take the money I normally spend there, and redirect it to paying off another month of my mortgage, or my credit card.
October 24th, 2008 at 9:24 pm
I’m all for The Fed sending me some ‘free’ money, but c’mon now, it isn’t the answer to getting the economy back on track.
October 27th, 2008 at 11:21 pm
I assume every business is in business to make money.
What business owner is going to hire new employees on the basis of the brief spurt of business another stimulus check might bring, much less start a new business, with Obama’s philosophy of Chicago-style regulations, hikes in capital gains taxes, hikes in marginal tax rates, “spread the wealth” and hate the rich (i.e., anybody who makes more than $250,000 in any one year)?
They’d have to be nuts. Part of this market collapse has to include the people, like me, who decided to lock in some of our capital gains this year to keep from having them seized by an all-Democrat government next year.
I only wish I’d liquidated everything instead of only some of it. Whenever McCain shows a slight uptick in the polls I’m tempted to buy, but have to remind myself that the media, ACORN and Soros have been busy bees all year and the safe bet is that it’s in the bag for Obama. Prices on some great stocks are getting so low it’s harder to resist every day, but I’m going to wait until after election day. An all-Democrat government is what we had for the last seven years of the Great Depression, and only war pulled us out of that one. Not something to bet on.
November 3rd, 2008 at 4:59 pm
Yeah, I could definately use that check, we have 4 kids my husband is the only one working and my unemployment has run out,, and i have not been able to find another job YET!! With Christmas right around the corner!! Hell yeah!! When you live paycheck to paycheck, ANYTHING will help,, US LITTLE PEOPLE!!
we dont all make 6 figures!!!!!!!!!! And yeah right, like im gonna save it!! ive got 4 KIDS!! WE NEED IT!!
November 5th, 2008 at 10:32 am
It seems to me that there is many people out there who really doesn’t need it so why not give their portion to the ones who really does need it. Maybe that will stimulate the economy even better. I am sure the people who don’t need or thinks it is a stupid idea won’t mind sharing.
November 5th, 2008 at 10:39 am
I agree with the comment that was said to the ones that don’t want it to just let the ones that do need it have theirs.
November 5th, 2008 at 11:52 am
Hi. I am in the same boat with all the middle class families that have fallen on hard times. First only my husband works and make $50k a year there our four in our family our son has asthma insurance sucks. we have a arm on our mortgage cant get refied our payment is crazy. Ive been out of work for 2 years unemployment has long run out. Our daughter gets ill easy so we are always robbing peter to pay paul. So YES YES to a second stimulus check. Oterwise christmas will not be. Give the money they will spend for christmas. Also i live in northern indiana everyone knows from the news this area is very bads off. So again YES YES on a second check. NOW!!!!!!!!!!!!!!!!
November 5th, 2008 at 10:42 pm
PLEASE SEND ANOTHER CHECK BEFORE CHRISTMAS, OUR LAST CHECK WENT ON BILLS. MAYBE IF THEY SENT A FAMILY ABOUT 10,000 EACH WE COULD BRING THE ECONOMY UP.
November 6th, 2008 at 11:58 pm
I, for one, would love another stimulus check. The last one I had to spend on bills, no choice. Hypothetically, lets assume we would receive a rebate check before Christmas….I know that plenty would spend it at the store for the holidays. And that IS stimulating the economy.
November 7th, 2008 at 10:48 am
@Sherri (32) – It is simply impossible to stimulate with debt. These stimulus checks are gimmicks that create an artificial temporary increase, if anything at all.
To truly stimulate the economy will require cutting taxes and reducing government interference in our lives.
November 7th, 2008 at 10:51 am
I have to say this–since being laid off last year, I have had to accept o job making 1/2 of what I was…I am own my own–with a mortgage and car payment…it was no fault of mine that my job is going to Mexico…I feel like the second rebate ck should be more than the first…this would help GREATLY with my bills! You look at the debtness of our nation now…we will never get out f it…so why not look after the Americans who could use the help? The ones who dont want it–heck, pas it to me–I will gladly take it to buy food, pay power bill and gas for my car!
November 7th, 2008 at 2:53 pm
Everyone talk about it want do us no good. I am one of the ones who suffer. I can’t afford my bills or to attend the doctor. My job dosent pay shit… and i bust my ass everyday. So, I am say end me the money help me pls. I have diabetis, high blood pressure, bronchitis, arthritis, must i go on…and i am only 26 yrs old. I need as much help as I can , I am a heard worker
November 7th, 2008 at 4:27 pm
IT IS SO EASY TO SAY THAT WE DO NOT NEED A STIMILUS CHECK,WHEN YOU MAKE SO MUCH MONEY THAT YOU DONT KNOW WHAT TO DO WITH IT.BUT IF YOU HAD TO WORK HARD AT A FACTORY JOB,THAT COULD BE GONE TOMMORROW,AND HAVE TO RELY ON OTHERS TO HELP YOU,THEN YOU WOULD CHANGE YOUR TUNE.HOW WOULD YOU LIKE TO WALK IN THOSE SHOES FOR A WHILE?
November 7th, 2008 at 4:48 pm
I’m “poor” and work for about minimum wage.
And I don’t “need” a stimulus check. I have yet to meet anyone who was “poor” for more than a few years because they just “couldn’t” help it.
Quite frankly, those who demand to be handed free money (literally) taken directly from those who built wealth… if you would just brush up on your words, and spend a few minutes thinking about what you are writing, you would come off a little better. Check your spelling and grammar.
If you keep telling yourself that you can’t do well, and that you need others — you always will. Welcome to reality.
Oh. Where do you think the money is coming from? The people. Yes, let’s rob the people to pay the people for the sake of the people. Economics doesn’t work that way. Sorry.
November 8th, 2008 at 11:59 pm
as a single mom the stimulus check would come in so greatly …. all these people who doesnt want the plan thats fine.. if it is passed and you get one jsut write “return to sender” and give it back to the mailman…. it wont be that hard for you to do ….
me on the other hand would probably break down and cry because then i would be able to afford to buy my kids some things for christmas which right now i cant do… i work but make barely enough for us to live on…. so when you all are saying this aint going to help anyone think about people like me and my kids who do the best they can and still have nothing….
November 9th, 2008 at 6:27 pm
yes that would be very nice specially single partents who live off one income with 4 kids then my kids will have a nice x-mas.
November 9th, 2008 at 7:16 pm
I agree with the person up there who says why shouldn’t we get the check? There are families out there, like my own who could really use the money. My family does everything the right way, we pay our bills and try not to buy the horse before the cart. We don’t purposely give ourselves raises when we know our budget doesn’t allow it. These corporations that give their CEO’s million dollar bonuses and run their companies into the ground are not better then the average American family. Why should they get a bail out while the ones who make this country run i.e. blue collar workers, suffer? Lets face it, if the government doesn’t give us some of the money, some Senator or member of Congress will find some earmark to give it too.
November 9th, 2008 at 7:26 pm
To Shaun, number 37, do you havies babies that drink formula and maybe you have lost your job and can’t afford it? I remember how much formula cost, and their are a lot of people out there that literally count their pennies to feed their kids. A stimulous check might not solve our economic crisis, but it might feed a few kids for a couple of months. Would you rather the money go to AIG so they can take another spa vacation?
November 9th, 2008 at 10:16 pm
well i think they should make another stimulas check! why??? we need it and a majority could use the money for the holidays and to pay down alot of there debt like people like my family! honestly the people who are bitchin about it shouldnt get one then give it to people who need it and can use it then…but dont ruin it for those who can USE IT/NEED IT!!! not all of us live in a high class environment…
November 9th, 2008 at 10:27 pm
and some people who do work which well all do. sometimes unexpected things come up and when you are a single parent makes it harder to survive in this world…no matter if you work or dont and yes that little extra money does help those WHO NEED IT!!! so im all for a 2nd stimulas check!!!
November 10th, 2008 at 2:43 pm
It would be nice if we would get one before christmas because we are living from one check to next i hope we can get back on top of things i don’t like living from check to check
November 10th, 2008 at 2:52 pm
you know i really can’t believe some of you people are against a 2nd stimulus check! oh wait if your against it you must have plenty of money unlike myself im a mother of 2 and my husband is the only one supporting us i’ve been out of work for a year due 2 back problems ,and the loss of my twin baby’s! so yes i do need that 2nd check as do alot of other low income families etc… we live paycheck to paycheck week to week day by day…….
we deserve it…
November 10th, 2008 at 8:12 pm
Yes, please…to a second stimulus check. I am a hard working woman from small town rural America. There is no job market in our small town. For those choosing to live here, fortunate enough to secure employment…a worker’s average annual income is in the neighborhood of $20,000 to $25,000 per year, and those are the jobs that are considered high pay! The average small town worker lives paycheck to paycheck and there is no money left for savings, certainly no “fun money” anymore. It is so offensive to see Celebrities and wealthy people on TV collecting their free swag bags that contain items valuing more than many of us could make in two years of 40 hour work weeks. ..people that could afford to pay for anything they could ever want, getting everything for free…but don’t get me started on that! Yes, I would welcome another stimulus check. I also believe that if stimulus checks went out in November, most average hard working Americans would stimulate the holiday retail season, because they would go Christmas shopping. Just my two cents.
November 11th, 2008 at 7:33 am
Wow, you people really aren’t listening to me.
Read this very carefully: IT IS ECONOMICALLY IMPOSSIBLE TO STIMULATE WITH DEBT.
It is an impossibility. I’m not saying that I don’t want to keep more of what I earn – I do. But, these gimmicks are NOT going to stimulate anything. They are simply vote-buying gimmicks.
The way to stimulate the economy is to lower taxes. History proves this many times over.
Now, just so you know that I’m one of those in need: I am currently unemployed (ZERO income, ALL outgo) and I am telling you that another gimmick “stimulus” check won’t do squat for the economy. Look, I need money, and I want to see the economy rebound, but a gimmick is not the way to do it.
Also, I find the sense of entitlement expressed by so many of you to be extremely disappointing. This is America – go out and make something of yourself! Don’t expect someone else to take care of you. Wow.
November 11th, 2008 at 7:43 am
I tried to add this, but couldn’t edit the comment:
So the real question is: what do you want? Do you want economic stimulus (tax cuts) or do you want a handout (stimulus check)? If you really want economic stimulus, start talking about tax cuts and spending cuts. If you want a handout, keep talking about that stimulus check.
For myself, I want what’s best for the economy and the nation, not selfishly just what’s good for me. That’s why I keep talking about tax cuts. I just wish I saw more of you with that same respect for your fellow American.
November 11th, 2008 at 2:36 pm
I keep reading comments about how poor we are and how much we need a stimulus check. First, if you are poor, how do you have a computer to read this article and respond on? Ok, maybe you went to the library in the car you drove there. Wait, maybe you rode your bike, but I am sure you called your friend on your cell phone on the way. I am engaged, planning a wedding, and trying to support my fiance through college. I don’t make even 40k a year yet I live within my means. If you can not survive without a stimulus check, then you definitely are not living within your means. Don’t tell me there is no job available as I can open any paper and find several, if you are willing to work at minimum wage. If it gets you back on your feet then it is helping. Also, if you are so poor you need that instant check which is maybe $600 to $1000 give up your cell phone. That alone would grant you the wish of the extra stimulus in the money you save. But wait, that would be giving up a right….err is it a frill.
November 11th, 2008 at 4:57 pm
Ibeen reading on this posted message for somedays. And, someone responded back we not poor cause we got a computer to read these posts. Cheak this out dumb ass you every heard of the library honey they do give you access to there you kno. I dont care what no one say, we need help people work hard every day to put food in there child months, clothes on there back, and not know how they goin to pay there next bill or scared to go to ER to get check because they dont want to make a big bill. So , go head give use the stimulate check and help us.