Personal Finance Ology

Now that the $787 billion stimulus package has been negotiated to terms both Congress and the President can agree upon, the new question is what effect does it have on those dealing with this weak economy. I know throughout all of the meetings and disagreements, I was curious as to how it would be changed around and how it would benefit me. Well here is what I’ve discovered after following this saga venomously.

According to CNNMoney.com the money’s allocation is broken down into three parts. $308 billion (39% of the money) goes to discretionary spending. This includes projects related to energy infrastructure, such as making homes energy efficient etc. $267 billion, which is 35% of the funds, is dedicated to direct aid. This increases unemployment and food stamp benefits. Lastly 26% of the funds, $212 billion dollars are allocated for tax relief focused mainly on individuals however some businesses may benefit from this relief as well.

In an effort to break the recovery plan down further I’ve decided to add a few pointers. The recovery plan includes:

A $400 credit per worker. A full credit is given to singles making $75,000 or less and for couples the credit will double for those making a combined $150,000 or less.

Temporary expansion of the child tax credit will lower the income requirement by $3,000 this year and next year.

Homebuyer incentives that are increased to $8,000 as opposed to $7,500 for homes purchased from January 1, 2009 to December 1, 2009. It also removes the requirement that made homebuyers pay back the credit if they stayed in the home over three years.

Car-buyer incentives offering the ability to deduct state and local tax if your income is less than $125,000 as a single filer or less than $250,000 if you are a joint filer.

Higher education tax credit goes from $1,800 to $2,500 and shall be in effect this year and next year.

Alongside these prominent points the recovery plan also has a lot more to offer. Other benefits include a twenty five dollar weekly increase to unemployment benefits, a 13.6% increase to food stamp payments, health insurance assistance for the unemployed, a 5% increase in the earned income tax credit, a one-time $250 payment to retirees, those who are disabled and those who are not working, it even offers a tax break for families in the higher income bracket.

I tend to believe this recovery plan covers a spectrum of assistance and it has the potential to assist a vast majority of people. As with anything it takes time to fix and recover all that has been lost but I am looking forward to it slowly reviving a dying economy. However, I am curious to see how others feel about this $787 billion recovery plan. Please feel free to comment, complain or applaud the efforts of the higher ups and vocalize any concerns, resolutions or tips on how you will use your portion for benefit. We all can learn from one another’s opinions and ideas!

Photo by: Shirley Two Feathers

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