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The Economic Stimulus Package of 2008 was an ambitious bill passed by the United States Congress in an attempt to address the faltering American economy. The goal of the package was to stimulate consumer spending and encourage businesses to expand, hopefully creating more jobs and further jump-starting the economy. Supporters of the legislation believed that it would bolster the economy and perhaps prevent a recession, or at least reduce the impact of a recession on the American people. Detractors raised concerns about whether the package was a sound financial move, out of concerns that it would increase the national debt.
Americans were most interested in the section of the Economic Stimulus Package which created rebates on tax returns, based on 2007 declared income. For anyone with no tax liability earning at least $3,000 US each year, the rebate would be $300, and doubled for couples filing jointly, while people making less than $75,000 US with tax liability would get rebate checks of $600 each, doubled for couples filing jointly. People making more than $75,000 US but less than $87,000 US would receive varying amounts, while people with higher incomes would receive no rebate check. The Economic Stimulus Package also included a payment of $300 for every child under the age of 17 by 31 December, 2007. According to Internal Revenue Service estimates in March 2008, over 130 million households would receive rebate checks.
The rebate checks built into the Economic Stimulus Package attracted a great deal of attention, and generated debate. Speeches by various politicians suggested that they expected consumers to spend the checks, thereby injecting cash into the American economy. However, surveys of Americans carried out by a variety of organizations indicated that most Americans intended to put the money in savings or apply it to debt. While these are sound financial decisions, they would not necessarily cause an uptick in the American economy.
Other sections of the Economic Stimulus Package created tax rebates and incentives for businesses, and raised the limits on Federal Housing Administration loans, in the hopes of making home ownership more accessible to lower and middle class Americans. The business incentives in the Economic Stimulus Package could potentially have more long-lasting benefits, encouraging businesses to remain in the United States, thereby creating jobs and keeping funds in America, rather than sending them abroad.
Critics of the Economic Stimulus Package of 2008 pointed out that the United States had a very high national debt, and that many countries including China hold much of America's debt, setting up a situation which could potentially be catastrophic. These critics also expressed a fear that the rebate checks would not stimulate consumer spending, and, if they did, the spending would likely be centered on high-value appliances made by companies based outside the United States, so the Economic Stimulus Package might be more likely to benefit foreign economies than the American one. These critics implied that the checks consisted of the “bread” in “bread and circuses,” with the farcical race for the Democratic Presidential nomination in the same year comprising the “circus.”
Will you receive stimulus package if you owe back taxes?