The US Senate passed a stimulus package a short while ago. From the Wall Street Journal:
The Senate passed an economic rescue plan that would speed $600 to $1,200 in rebates to most taxpayers and $300 checks to low-income people, including disabled veterans and the elderly. The 81-16 vote capped more than a week of political maneuvering that ended only when majority Democrats dropped their demand that the proposal offer jobless benefits, heating aid for the poor and tax breaks for certain industries.
Evidently, House leaders are working on trying to get passage started tonight.
I haven’t seen the bill yet. Hopefully the text will be available this evening.
Not having seen any reason to believe it will actually stimulate the economy (I and most people I know plan to sock the money away or pay down outstanding debts), and certainly will have a negative impact on the credit industry (pay down more debt, less interest for lenders to earn) and highly unlikely to impact bad debt (I know some people will pay down debt, but most people in those situations are more likely to buy things they’ve been sacrificing to begin with). What’s needed, in my opinion, is a credit stimulus package.
Credit stimulus means providing a motivation for people to comfortably (and appropriately) use credit to make discretionary purchases. If people can build that comfort level, they are more likely to buy more, which is what Congress and Bush think their cash-based package is going to accomplish.
One simple motivation is already building momentum in the credit industry thanks to reductions in fed rates, and that’s reductions in interest rates offered to consumers. I’m sure there are other ways, whether through creative credit programs or better marketing. I’m not a fan of credit cards myself, at least not in going beyond your means, but I think they can be a good tool if used wisely, and certainly 12 months same as cash is a great way to make larger purchases.
Some states (I think Iowa is one) have looked at a tax-free day – everything you buy, no sales tax. The only problem with that is people are likely to hold off on discretionary purchases until that day, and thus exacerbate an already tenuous problem. So, I’m not really keen on that one.
If you got ideas, let’s talk about them!