I’ve written several times about the economic stimulus checks and even answered quite a few questions about it as well. One of the most common questions I have gotten recently is whether or not there will be a second economic stimulus check. Right now there is no definitive answer, but the Democratic party is leaning heavily on a 2nd stimulus check as part of their election campaign.
In June, Barack Obama proposed to spend $50 Billion on an emergency economic stimulus package to relieve pressures on the current economy. Not only have rising gas prices caused a lot of problems for the economy, but so have increases in food prices, home foreclosures, job cuts, and more. Obama’s proposal also includes tax relief for retirees, seniors, and the middle class, debt relief for students, extended unemployment benefits, and the establishment of a $10 billion foreclosure prevention fund.
Two Part Emergency Economic Stimulus Plan
The first part of the emergency economic stimulus plan is a $50 billion emergency energy rebate which would give permanent tax breaks of $500 to individual workers and $1,000 to families. This could happen as soon as this fall. According to Obama, “This rebate will be enough to offset the increased cost of gas for a working family over the next four months. Or, if you live in a state where it gets very cold in the winter, it will be enough to cover the entire increase in your heating bills. Or you could use the rebate for any of your other bills or even to pay down debt.”
This is the first part of Barrack Obama’s Emergency Economic Plan:
1. Forcing big oil companies to take a reasonable share of their record breaking windfall profits and use it to help struggling families with direct relief worth $500 for an individual and $1,000 for a married couple. The relief would be delivered as quickly as possible to help families cope with the rising price of gasoline, food and other necessities. The rebates would be fully paid for with five years of a windfall profits tax on record oil company profits. This relief would be a down payment on Obama’s long-term plan to provide middle-class families with at least $1000 per year in permanent tax relief.
The second part of the plan calls for a $50 billion stimulus that, according to Obama’s campaign, would save more than a million jobs. The money from this part of the stimulus would be split among state and national government agencies and would go toward rebuilding roads, repairing bridges, and repairing schools.
How Will the Government Pay for the Proposed Second Stimulus Check?
Obama proposes to place a “a windfall profits tax” to pay for the $1,000 emergency rebate checks to help consumers pay for $4 a gallon gas. The windfall profits tax would come from US oil companies, primarily Exxon Mobile.
It seems like Obama’s plan is to increase taxes on the oil companies because they were extremely profitable. But is that really fair? Yes, Exxon Mobil and other oil companies are obscenely profitable. Exxon posted a quarterly profit of $11.68 billion this quarter, which comes out to $1,485 per second. Insane! But that doesn’t mean the profits are going straight into a corporate bank account and sitting there. Exxon spent $7 billion dollars last quarter finding and producing more oil. I’m not defending big oil, but I think it’s too easy to make them a scapegoat.
Will a Second Stimulus Check Improve the Economy?
Many Democrats were vocal opponents of the first economic stimulus check when it was announced. Now key leaders in the Democratic party, including Obama and Nancy Pelosi, are behind pushing an emergency stimulus package through. How much will it help? According to Barrack Obama, a second stimulus check will help people for 4 months.
“This rebate will be enough to offset the increased cost of gas for a working family over the next four months,” Obama said during a two-day campaign swing in Florida. “It will be enough to cover the entire increase in your heating bills. Or you could use the rebate for any of your other bills, or even to pay down your own debt.”
What happens after the 4 months are up? Will the economy have righted itself? Will a more permanent solution be in place? Is it really fair to require a company such as Exxon Mobil to subsidize the American lifestyle for 4 months?
Should the Government Support a Second Stimulus Check?
By most accounts, the first stimulus check didn’t make a marked impact on the economy (in fact, many people still haven’t received their checks yet). The economy is still facing an uphill battle, much of which is caused by high oil prices and increasing costs for essentials such as food and housing. Personally, I don’t think a 2nd stimulus check is the answer. What do you think?
Note: This article was originally published in 2008. It has been updated for clarity and to remove broken links.