Will Obama’s Stimulus Plan Work?

President Obama’s stimulus plan passed in Congress but now is headed to the Senate where it likely will have trouble passing as it is written now.  This new stimulus package is nearing $1 trillion in new spending with little in the way of tax breaks, which is what the GOP is looking for.

Recently a new ad campaign was launched to counter this new stimulus.  The campaign includes the signatures of hundreds of well-known economists who are basically telling Obama not to do it because they believe the stimulus will fail and leave taxpayers with the bill.

However, this does not mean that the economists side 100% with the Republicans either.  They do believe that tax breaks are the solution but not the type that just provide checks to those who can’t pay taxes.  They’re looking more to reduce the overall tax rate so businesses can grow, invest and save, likely similar to the environment with President Reagan during the 1982 recession.

But tax breaks are not necessarily what many Americans are looking for because it’s not a very short-term fix.  Many are anticipating a stimulus check very soon, which according to Obama’s plan, would be about $500 per adult and child.  

The stimulus launched in early 2008 provided checks of $300 per person and did little (if anything) to stimulate the economy.

Small Businesses in Crisis > Personal Debt and My Business

Small business provides the majority of the jobs in the U.S., but during the deepest recession since the Great Depression, those jobs have tailed off.  Small businesses are not alone has large corporations, even discounter WalMart, have been hit hard.

But the difference between a large corporation and a small business is who takes the risk.  In a small business it’s typically the owner who has to put their credit, house and life on the line to make it happen.  So when the economy turns for the worse, it’s particularly hard and often scary.

If your small business is in crisis, you’ll likely need to make immediate cuts to expenses with the largest being payroll, if you have employees.  Next could come rent, inventory and services.  All businesses are different so find out what your essentials are and keep those only.  The key today is to survive while protecting your personal assets and credit.

The recession is predicted to last throughout 2009 with a sold turn-a-round in 2010, so that’s a full year to survive.  If you’ve run up credit card debt for the business and in your personal name, consider consolidating that debt for a lower payment and quicker pay-off time.  Some venture into bankruptcy, which might be the only option for a handful of people but that is expensive and will leave a mark on your credit for up to 10 years.

For assistance with unsecured business debt in your name, call a debt relief specialist at (888) 233-3213 or fill out the short form below:

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Money Management for kids

Money management is tough for everyone, particularly during our deepest economic downturn since the Great Depresssion.  Rising  job losses continue to mount.  In fact, unemployment rose to 7.2% today and will likely get higher throughout 2009 with improvement expected in 2010.

These are tough times, times where what money a person has needs to be managed properly but it also provides a fantastic opportunity to teach your kids about the value of money.

Money is not as easy to get as it was in 2005-2006.  Credit has tightened, businesses have gone under, 401k’s have been lost and home equity has all but disappeared.  Take the money you have and use it wisely, teach your kids about the process and how the economy and credit works.  They’ll thank you later.

Here are a few things you can do (while also teaching your kids):

-Cash is king, conserve it and save
-Don’t tap your 401k unless it’s the absolute last option you have.  The penalties and fees will hurt you.
-Keep looking for work if you’ve lost your job, even if it’s in a different industry for less money.
-Buy things you need and leave everything else behind
-Look for deals on craigslist and ebay.  There’s absolutely no reason to to pay full price for anything.
-If you’re tied up in unsecured debt now, find a way out.  Options include bankruptcy and debt consolidation.  

Bankruptcy will cost you $1500-$2500 for the attorney while also placing a serious mark on your credit for up to 10 years.  Debt consolidation will reduce your debt payments, pay it off over a limited period of time and also protect your good credit (stopping collection agencies)

If you’re stuck with credit card debt, call a debt relief specialist for a free consultation:  (888) 233-3213 or fill out the short form below:

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Liquidate, refurbish, fix and save > Saving cash during a recession

During the deepest economic downturn since the Great Depression, people have stopped buying new and have begun fixing what they already own.  These new tactics have destroyed the retail industry while boosting others.

If you want to find busy businesses, look no further than those that offer repair.  Some examples would be auto repair as opposed to buying new or having a heel repaired on a shoe as opposed to buying a new pair and throwing out the old.  In both of these cases, you’re going to save cash, even on the auto repair.  Most studies say keeping a car for at least 10 years is financially the best way to go, so stop flipping those cars and get the one you have fixed or at least tuned up.

Turn things you don’t need into cash (or find what you need) on ebay or craigslist.  Electronics and furniture do very well on Craigslist while items that are easier to ship do very well on ebay.  Either way you can find a deal or liquidate what you don’t need and turn it into cash.

After you’ve exhausted your resources, eliminated as many debts as possible and reduced expenses research debt consolidation.  It’s a way to reduce your amount of unsecured debt while also saving your credit.  For more information call (888) 233-3213.

 

Bailing out Amex and the Casino industry?

Were you upset about the auto industry bailout?  Many people are as the government dished out $17billion to save General Motors and Chrysler, who may ultimately merge but that is yet to be seen and both deny it is happening.

If the auto bailout did upset you, how about bailing out Amex and the casino industry?  We’ll start with the casino industry who poses the argument that they employ more people than the auto industry.  They also feel that the crisis started in Vegas so it needs to end there.  A slow economy hurts many businesses but we never would have guessed that the casino industry would come begging for tax payer money.

Today Amex was given about $3.5billion as part of the TARP money, an absolute baffling move given how the credit card industry contributed to the meltdown we’re in today.  Easy credit for anyone who would sign on the line helped liquidity for consumers but it also gave credit to those who probably shouldn’t have had it in the first place.  Now those people are defaulting on their cards and pushing huge losses on the credit card companies.

In an effort to counter these losses, card companies decided to raise interest rates on current balances, cancel lines altogether and decrease lines with very little notice.  All of these moves directly affected consumers, the ones actually paying their bills.  Now Amex is using taxpayer money to bail out their company?  This seems like double dipping to us.  If you’re going to use taxpayer money to save your company, you should make some positive moves for the consumer, not raise their rates or reduce credit lines with little notice (which affects your credit score by the way).

If your credit card companies have stuck you with increased fees and interest rates that you are now unable to pay, contact a debt relief specialist for help:  call (888) 233-3213 or fill out the short form below.

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Retailers Demand Stimulus Before the Holidays

With retail sales down sharply each month and the holidays around the corner, retailers are looking for help.  It seems no amount of marketing will help when people simply don’t have the money to spend.

The recently passed $700 billion bailout plan is getting cut up quickly with large chunks going to banks to free up credit as well as billions going to the auto industry to keep them afloat, but will any of this end up in the hands of retailers and if it does, will it be fast enough?

The concern many have is if another stimulus package is passed, will the money end up with the consumers where it needs to be and will it be enough?  One would think that if the Fed is looking to distribute a stimulus check they would at least try to get it going before the holdays are over.

Stay tuned on this story as it’s constantly evolving and no one knows yet quite where it will end up.

Who’s at fault and does it matter now?

It seems what comforts people most during a financial crisis is to make sure someone is blamed for the mess or at least that’s the position congress is taking.  It won’t help any of us right now to improve our financial situation but in essence it makes those responsible accountable for their actions.

Congress grilled the previous fed chief, Alan Greenspan and repeatedly asked him if he was at fault in full or in part.  Greenspan deflected most of these questions but did give a good idea of the policy decisions that had an impact on where the economy is today.

This is no comfort to those struggling but we do know that better times will come.  For now, it’s best to protect your credit and eliminate debt where possible so you’re ready when things improve.

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Less Product For Your Money At The Grocery Store

The economy has been tough on everyone, even manufacturers but is what they’re doing now really fair?  CBS reports on product downsizing also known as a “weight out”.  The idea is very simple.  Manufacturers reduce the amount of product placed into packages and therefore reduce cost. 

The problem consumers have is that they don’t realize they’re getting less for their money.  When is the last time you saw a product that said “New Smaller Size!”.  It doesn’t happen so the manufacturers count on you not knowing.  They’ll even go so far as to taper ice cream containers and invert the bottoms of glass jars instead of just being honest about the price increase.

Next time you go grocery shopping beware of manufacturer weight outs!

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Will Unemployment Continue to Rise?

Unemployment has been on the rise for quite some time as the economy continues to slide into recession.

The question most people are asking is when will the employment picture get better?  Many are depending on promises from both presidential candidates to make serious improvement to our economy but which plan will work best to create jobs?

This video from Fox News discusses this issue with business owners in New York who are traditionally recession-proof given the area is profitable in tourism.  But what about areas hard hit without the tourism or industries that took a direct hit like housing?

Keeping Your Money Safe

It’s a difficult economy, so difficult that many are worried about their money being safe in certain investments even standard bank accounts!

This video gives some great ideas on keeping your money safe in a variety of situations.  401k’s are of great concern to many because values have dropped significantly.  So what do you do when your 401k has lost value?

The answer is it depends on the situation.  If you need the money now or within a few months, say for college tuition, then convert it to cash and keep it safe.  If you don’t need the money right away then leave it in.  This way you won’t miss the market bounce.  In the future it might be best to not be 100% invested in the stock market.

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